PHILADELPHIA – An antitrust action was put on pause for 90 days as the U.S. District Court for the Eastern District of Pennsylvania stayed the case for limited jurisdictional discovery after the defendants moved to dismiss.
Judge J. Curtis Joyner ruled on the case on April 10.
Spring Pharmaceuticals LLC sued Retrophin Inc., Martin Shkreli, Mission Pharmacal Co., and Alamo Pharma Services Inc., claiming they took part in anticompetitive practices in the pharmaceutical industry as it relates to the tiopronin product, Thiola, that defendants manufacture.
Thiola is an off-patent product but also the only tiopronin product that the FDA has approved. It’s designed to treat cystinuria, an uncommon genetic illness that causes kidney stones.
Spring took issue with the defendants’ business model in which they “remove Thiola from normal distribution channels and refuse to deal samples of Thiola which are necessary for any generic seeking FDA approval,” according to the decision.
Spring said this is a violation of antitrust laws and an act of anticompetitive conduct as it blocks Spring, which is a new pharmaceutical company, from creating a generic version of Thiola.
The defendants filed a motion to dismiss, and the court issued a 90-day stay that would allow room for limited jurisdictional discovery. Retrophin specifically said Spring didn’t have constitutional standing and asked for limited discovery to find out. Spring has the obligation to prove it suffered an injury “that is fairly traceable to the defendant’s allegedly unlawful conduct and that its likely to be redressed by the requested relief.”
The defendants say Spring doesn’t meet this requirement and claim it’s actually not a generic pharmaceutical company, and that it’s not at any stage of attempting to develop a generic version of tiopronin. Instead, they say it’s a business that was created by a former associate of Winston & Strawn, which is the counsel in this suit, and his wife, a CPA, as an attempt to sue. They added that Spring doesn’t even have a physical office, just a virtual and shared workspace.
Spring challenges this and says that it’s a new company with the intent of creating a generic version of Thiola, and that it has taken action to do so. It added that Spring was created in 2017 as a family business with an effort to provide affordable pharmaceutical products and that the creator has ties a background of working with pharmaceutical companies.
Considering the back-and-forth, the court put a stay on the motion to dismiss to allow discovery to evaluate Spring’s actual standing if any.