This opinion addresses two sets of consolidated appeals concerning two pharmaceutical drugs: Lipitor and Effexor XR. In both sets of consolidated appeals, plaintiffs allege that the companies holding the patents related to Lipitor and Effexor XR fraudulently procured and enforced certain of those patents. Plaintiffs further allege that those companies holding the patents entered into unlawful, monopolistic settlement agreements with potential manufacturers of generic versions of Lipitor and Effexor XR. The same District Court Judge dismissed the complaints in the Lipitor litigation and dismissed certain allegations in the Effexor litigation. Those decisions relied on plausibility determinations that are now challenged on appeal.
We begin with a brief summary of the relevant regulatory scheme applicable to pharmaceutical drugs and then detail the factual and procedural backgrounds of these two sets of consolidated appeals. The remainder of the opinion broadly covers two issues. First, in F.T.C. v. Actavis, Inc., 133 S. Ct. 2223 (2013), the Supreme Court concluded that payments from patentees to infringers through “reverse payment settlement agreements” are subject to antitrust scrutiny. Id. at 2227. In both sets of consolidated appeals, plaintiffs allege that the companies holding the pharmaceutical patents and the generic manufacturers entered into such agreements. We are asked to decide whether those allegations are plausible. We conclude, as to both sets of appeals, that they are. Second, regarding only the Lipitor consolidated appeals, we address whether plaintiffs in those appeals pled plausible allegations of fraudulent patent procurement and enforcement, as well as other related misconduct. We again determine that those allegations are indeed plausible. Accordingly, we will reverse the District Court’s dismissal of the complaints in the Lipitor litigation, reverse its dismissal of the allegations in the Effexor litigation, and remand for further proceedings.