What’s in the Record? Implications of the Asacol Case for Pharmaceutical Class Actions

The First Circuit decision in In re: Asacol Antitrust Litigation may prove to be a watershed for class certification questions in pharmaceutical antitrust suits.

The ramifications of the decision could signal a significant change in whether and how plaintiff classes will be certified in future suits. To see why, it is helpful to set the Asacol decision against the backdrop of an earlier case decided by the same circuit: In re: Nexium Antitrust Litigation.

In Nexium, the appeals court affirmed a district court decision that certified a class for trial even though the class contained members who plaintiffs conceded were not injured by the allegedly anticompetitive conduct.

The district court in Asacol claimed to follow Nexium by holding that the approximately 10% of class members who had not been injured-in-fact by the actions of Asacol’s manufacturer, Warner Chilcott, was “de minimis,” and that they could be removed by a claims administrator during a later phase of the trial.

On appeal, however, the First Circuit ruled that this scheme ran afoul of Federal Rule of Civil Procedure 23’s directive that common questions predominate over individual issues. Bruce Strombom, an Analysis Group expert for the defendant, introduced evidence of myriad reasons why some class members would not have been injured – chief among them, that they would remain loyal to the brand version of the drug, irrespective of the lower price of a generic alternative. In addition, other patients stopped taking Asacol during the relevant period (and therefore wouldn’t have switched to a generic) or faced no drug copay, and so had no basis for inclusion in the class.

In the aftermath of the Asacol opinion – which was cited by a district court in New Jersey only weeks after being handed down – experts may be called on to scrutinize class composition in a much more granular way, in order to determine the impact – or lack of impact – that the but-for world would have had on individual consumer segments differentiated by behavior, brand loyalty, cost consciousness, or other characteristics that might influence their purchase decisions.

While the Asacol court averred that its holding was respectful of “the practical realities of class actions,” it seems to have signaled that anything less robust would violate a defendant’s due process rights. ■

Aaron Yeater, Managing Principal
Pavel Darling, Managing Principal
Stephen Fink, Managing Principal

Adapted from “The State of Pharma Class Certification After Asacol” by Aaron Yeater, Pavel Darling, and Stephen Fink, Law360, December 18, 2018.