The opinion of the court was delivered by: Harold Baer, Jr., District Judge
Louisiana-Wholesale Drug Company ("Louisiana Wholesale" or "Plaintiff") filed a complaint on August 17, 2007 alleging that Aventis Pharmaceuticals, Inc. ("Aventis"), SanofiAventis, and Sanofi-Aventi U.S., LLC ("Defendants") violated antitrust law under Section 2 of the Sherman Act, 15 U.S.C. § 2 when it filed a sham Citizen-Petition to the Federal Drug Administration ("FDA") to block the approval of five generic manufacturers' Abbreviated New Drug Applications ("ANDA") to produce a generic version of Aventis' rheumatoid-arthritis drug leflunomide, called Arava. Louisiana Wholesale claims that Aventis filed the Petition to willfully maintain and extend its monopoly power over the drug and be able to continue to charge supra-competitive prices to direct purchasers like the Plaintiff and the public at large. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) on three grounds.
First, Defendants argue that the Citizen-Petition was not a sham, but legitimate petitioning activity pursuant to FDA regulations under the Noerr-Pennington doctrine, which provides First Amendment-based immunity from antitrust liability. Defendants argue that even if the sham exception to Noerr-Pennington immunity applied, the Plaintiff has failed to prove that the Petition was "objectively baseless," a required hurdle in deciding to strip it of its First Amendment protection. Second, Defendants allege that the Plaintiff lacks antitrust standing to sue Sanofi-Aventis for two reasons. Defendants state that the Plaintiff failed to allege any facts to support its allegation that Defendants actually delayed FDA approval of the generic drugs. Defendants also argue that the most "efficient enforcers" of antitrust claims here are the generic manufacturers, not Louisiana Wholesale. Finally, Defendants argue that the Plaintiff has failed to allege a "relevant market" as required by Section 2 of the Sherman Act.
For the reasons set forth below, I deny the Defendants' motion to dismiss the complaint on all three grounds.
Plaintiff alleges that Defendants used willful and exclusionary means as part of a scheme to improperly maintain and extend their monopoly in the leflunomide market. Compl. ¶ 82. Specifically, Plaintiff alleges that Defendants' scheme was to delay or minimize the entry of generic leflunomide competitors into the market, which would have permitted sale of the generic drug in the United States at prices significantly below Defendants' prices for Arava, the brand version of leflunomide. Compl. ¶ 83. Defendant Aventis acquired the exclusive right to market Arava in 10-milligram (mg), 20-mg and 100mg strengths for five years and six months on September 10, 1998. See Compl. Exh. 1, at 3. The 100mg strength served as a loading dose to be taken for three days to "quickly reach steady state plasma concentrations" of the metabolized form of leflunomide. See Compl., Exh. 1, at 2. Aventis stopped selling the 100-mg tablet in pharmacies in January 2002, but continued distribution at no charge to physicians via blister packs of three tablets for the loading dose. See Compl. Exh. 1, at 1, 3. Five generic manufacturers submitted Abbreviated New Drug Applications ("ANDAs") seeking permission to market and sell AB-rated generic leflunomide*fn1 on March 10, 2004, the exact date of expiration of Aventis' exclusive marketing period. See Compl. ¶51; Compl. Exh. 1, at 3, n.6.
Plaintiff alleges that Aventis filed an "objectively baseless (i.e. sham) Citizen Petition" to delay FDA final approval of these ANDAs. Compl. ¶¶ 5-6. Pursuant to FDA regulation 21 C.F.R. 10.30, any person may file a Citizen Petitions with the FDA to request that the FDA take, or refrain from taking, administrative action, including approving or denying ANDAs, based on genuine safety, scientific or legal concerns . See Compl. ¶35. Plaintiff alleges that Aventis filed the Petition on March 31, 2005 "on the eve" of final approval, one year after the generic manufacturers submitted their ANDAs to the FDA for approval. See Compl. ¶ 51; see also Compl. Exh. 1, at 3, n.6. Plaintiff alleges that Aventis knew that filing the petition would delay FDA approval pursuant to FDA practice, which considers and rules on Citizen Petitions prior to granting final approval to ANDAs. See Compl. ¶ 51; Compl. Exh. 1, at 3, n.6. On September 13, 2005, six months later, the FDA responded that Aventis's "Petition is denied. . . . based on a review of the Petition and the comments submitted in response to it, as well as other information available to the Agency." See Compl. Exh. 1 at 1.
Plaintiff filed its Complaint on August 17, 2007 alleging violations of the Section 2 the Sherman Antitrust Act, 15 U.S.C. §2 and requesting treble damages, which are authorized for anticompetitive injuries under §4 of the Clayton Act, 15 U.S.C. §15. The complaint was supplemented by two accompanying Exhibits: (1) the letter from Dr. Steven K. Galson Director of the Center for Drug Evaluation and Research, Department of Health & Human Services, to Aventis Pharmaceuticals, Inc. denying the latter's Citizen Petition dated September 13, 2005 and (2) the Citizen Petition filed by Aventis Pharmaceuticals Inc.'s Citizen Petition filed pursuant to Section 505(j) of the Federal Food, Drug, and Cosmetic Act ("FDCA") (21 U.S.C. §355(j)), 21 C.F.R. 314.94(a)(7) and 21 C.F.R. part 320 dated March 31, 2005. Defendants moved to dismiss the complaint under Rule 12(b)(6) of the F.R.C.P. on October 15, 2007. A hearing on the motion was held on January 4, 2008.
B. Legal Standard Governing Motions to Dismiss
A complaint should be dismissed if it "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Historically, courts have cautioned that motions to dismiss in antitrust cases should be granted "very sparingly" and that "the plaintiff should be given ample opportunity for discovery." See Am. Med. Assoc. v. United Healthcare Corp., No. 00-Civ-2800, 2007 WL 683974 (S.D.N.Y. March 5, 2007) (quoting Hosp. Blg. Co. v. trs. Of Rex Hosp., 425 U.S. 738, 746 (1976)); see also, e.g., Dickson v. Microsoft Corp., 309 F.3d 193, 212 (4th Cir. 2002). While detailed factual allegations are not needed, they must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true to survive a Rule 12(b)(6) motion to dismiss. Bell v. Twombly, 127 S.Ct. 1955, 1964 (2007).
"In deciding the motion, the Court may consider documents referenced in the Complaints and documents that are in the relevant antitrust plaintiffs' possession or that they knew of and relied on in bringing suit [and t]he "Court may also consider 'matters of which judicial notice may be taken.'" In re Buspirone Patent Litigation, 185 F. Supp. 2d 363, 367 (S.D.N.Y. 2002) (internal citing references omitted). Id. (internal citing references omitted).
Section 2 Claims under the Sherman Antitrust Act -- 15 ...