PENNSYLVANIA RECORD

Shortly after approving a $150 million settlement between GlaxoSmithKline and a direct

purchasers’ class of the generic version of the drug Flonase, a federal judge approved a similar settlement in the antitrust litigation involving indirect purchasers of the pharmaceutical, which is designed to treat inflamed nasal passages due to seasonal allergies.

On June 19, U.S. District Judge Anita Brody, sitting in the Eastern District of Pennsylvania, signed off on a $35 million settlement between the indirect purchasers’ class and GSK.

Brody also approved of the awarding of attorneys’ fees in the amount of $11,655,000, and the reimbursement of $1,848,720.15 in expenses.

Four of the named plaintiffs in the case – Medical Mutual of Ohio, the AFL Plan, the IBEW Plan, and Painters District Council – were awarded $10,000 each in incentive payments, while the fifth named plaintiff, Andrea Kehoe, was awarded $5,000.

Class counsel originally sought $25,000 each for the four aforementioned named plaintiffs and $10,000 for Kehoe.

The settlement approval comes at the end of nearly five years worth of antitrust class action litigation in which GSK was accused of filing sham citizen petitions with the U.S. Food and Drug Administration to delay entry of a cheaper, generic version of Flonase into the market, resulting in overcharges to the indirect purchasers.

The initial indirect purchaser complaint was filed against GSK in July 2008, with discovery beginning later that year and continuing through mid-2010.

During that time period, more than 30 depositions were taken of current and former GSK employees and workers employed by Roxane Laboratories, which is the maker of the generic version of Flonase, or fluticasone propionate, the record shows.

Brody granted class certification after what she termed “extensive oral argument.”

Brody approved the settlement in light of the fact that the litigation would likely be expensive and protracted should the case be allowed to remain in the tort system.

“Antitrust class actions are particularly complex to litigate and therefore quite expensive,” the judge wrote in her memorandum. “The settlement avoided the need for a difficult and expensive multi-week trial involving complex scientific and regulatory testimony, and the time and expense associated with the appeal that would likely have followed a verdict.”

The judge also stated that the reaction of the indirect purchasers’ class to the settlement has been “overwhelmingly positive,” with more than 8,000 consumer claim forms having been downloaded since late March.

Only one consumer requested exclusion from the class, Brody noted, although the man’s exclusion didn’t appear related to the merits of the settlement.

As for the attorneys’ fees, the near $11.7 million awarded to class counsel represented roughly one-third of the entire $35 million settlement funds.

The plaintiffs’ attorneys declared they spent more than 32,700 hours throughout the course of more than four years litigating the antitrust case.

“The record of this litigation also indicates that the time spent by Plaintiffs’ counsel was necessary for the successful prosecution of this case, considering both the complexity of the issues and the robust defense mounted by the defendants,” Brody wrote in her memorandum.

Lead plaintiffs’ counsel in the case were attorneys from the firms Miller Law and Pomerantz, Grossman, Hufford, Dahlstrom & Gross.

Brody noted that trial in the antitrust case was just two months away at the time the parties reached their agreement.

The judge had granted preliminary approval of the settlement back in January of this year.