Legal Intlligencer
By: Amaris Elliott-Engel
July 5, 2012
A federal trial judge has approved the national settlement of a multidistrict litigation class action alleging that the generic version of the popular antidepressant drug Wellbutrin was not as therapeutically effective as the brand-name drug. He also took a shot at a landmark U.S. Supreme Court decision in the process.
The drug makers agreed to give injunctive relief to the class by changing their product labels and taking other measures that the plaintiffs say will protect consumers. A total of $4.5 million in attorney fees and class counsel costs also was approved.
As U. S. District Judge Berle M. Schiller of the Eastern District of Pennsylvania approved the settlement in In re Budeprion XL Marketing and Sales Litigation on Monday, he said that the settlement was prudent because the plaintiffs faced serious risks to establishing liability in the wake of a landmark U.S. Supreme Court ruling that sharply curtained the claims that pharmaceutical plaintiffs can make against generic drugmakers over drug warnings.
“The class faced the very real possibility of walking away with nothing,” Schiller said.
The settlement comes just over a year after the U.S. Supreme Court’s decision in Pliva v. Mensing.
Because the Supreme Court held that a generic-drug manufacturer “was foreclosed by federal law from changing its label without” the approval of the federal Food and Drug Administration and cannot abide by stronger requirements under state law, consumers who take generic drugs are stripped of their right to compensation, Schiller said.
“An individual’s ability to sue for damages caused by prescription medication should not depend on whether the drug was a name brand or a generic,” Schiller said. “If drug manufacturers are legally responsible for their products (like every other maker of a good), generic-drug makers should not be immune from liability.
“The Supreme Court decision renders generic-drug makers parrots, free from liability provided they do a competent job copying the label of the name-brand-drug maker’s label.”
The judge approved $3.2 million in attorney fees, $1.3 million in class counsel costs, incentive awards of $10,000 to two class representatives and $5,000 to other named plaintiffs.
Schiller said the attorney fees were reasonable because the lodestar would result in $6.7 million in attorney fees, but class counsel asked for $3.2 million, “mindful of the lack of a monetary recovery for individual class members” and how their case was undercut by the Mensing decision.
The parties agreed to settle the plaintiffs’ claims regarding the defendants’ business practices under California’s Unfair Competition Law and under the California Consumer Legal Remedies Act. The total member of class members is estimated to be as many as 2.24 million people.
The plaintiffs claim that defendants Teva Pharmaceuticals and Impax Laboratories Inc., respectively, distributed and made a generic formulation of the antidepressant Wellbutrin that was not as therapeutically effective, according to the plaintiffs’ memorandum in support of preliminary approval of the proposed class action settlement.
Bupropion hydrochloride is the active ingredient in Wellbutrin.
Defendant Impax Laboratories Inc. makes a generic version of Wellbutrin that uses a “matrix technology” that relies on the size of the pill to release the medication, and that generic reaches peak concentration in the human body in two hours. Schiller said. In contrast, other generics use a membrane-release technology so that the active ingredient seeps through a membrane that “actually passes through the entire GI [gastrointestinal] tract intact,” does not involve “dose dumping” and reaches peak concentration in five hours, the judge said.
Defendant Teva Pharmaceuticals distributes Impact’s generic version of Wellbutrin.
The plaintiffs claim that the labels on the defendants’ generics indicated that they were equivalent therapeutically to Wellbutrin, including that they would reach peak concentration in the bloodstream of the human body in five hours, not just two hours, Schiller said. The plaintiffs also said, among other claims, that the defendants failed to disclose that taking the defendants’ generic versions with food increases the amount of the drug released into the body; that a 300-milligram version of the generic drug was never tested as bioequivalent with Wellbutrin; and that the defendants’ generics employ “an inferior release technology,” Schiller said.
“The representative plaintiffs all took defendants products to treat their depression but their symptoms instead worsened,” Schiller said when finding that the typicality prong had been established for the class. “Had they known that the differences in defendants’ products rendered them useless as antidepressants, plaintiffs would have not purchased defendants’ medication. Defendants failed to disclose important information to consumers, in violation of California consumer protection laws.”
The judge, however, said that it was “close” as to whether the class met the dictates of Federal Rule of Civil Procedure 23(b), which requires that injunctive relief should only be granted if a single injunction would provide relief to each class member. One objection to the settlement was that the class counsel also sought monetary damages.
Schiller said that the request for statutory damages does not foreclose a settlement class under Rule 23(b)(2) because statutory damages “avoid an individualized calculation of damages. Plaintiffs also proposed a complicated mechanism whereby restitution damages could be calculated for the entire class.”
The objections to the settlement included the Texas attorney general’s objection that the settlement “is akin to a coupon settlement with attorneys receiving all the proceeds,” and Jaquelyn Anderson’s objection that people who have stopped using the drug receive no benefit from the injunctive relief and the attorney fees requested are disproportionate to the benefits obtained for the class.
Plaintiffs counsel were Richard M. Golomb, Ruben Honik and Kenneth Grunfeld of Golomb & Honik in Philadelphia; Allan Kanner and Conlee S. Whiteley of Kanner & Whiteley in New Orleans; Gillian Wade of Milstein Adelman in Santa Monica, Calif.; Brian Ku and M. Ryan Casey of Ku & Mussman in Miami; and John Vail and Lou Bograd of the Center for Constitutional Litigation in Washington, D.C.
Kanner was lead counsel and Golomb & Honik was liaison counsel.
Impax laboratories defense counsel was Asim M. Bhansali of Keker & Van Nest in San Francisco, and Teva Pharmaceuticals defense counsel was Joseph Serino Jr. of Kirkland & Ellis in New York.
Attorneys for the defense could not be immediately reached for comment Tuesday.
“We are pleased with the injunctive relief we were able to provide to the class in the form of label changes and quality control and thank Judge Schiller who was very involved every step of the way,” Golomb said in an email.
