Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 1 of 57 PageID #: 1210
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`BAXTER HEALTHCARE CORPORATION,
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` Plaintiff,
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`v.
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`HOSPIRA, INC. and ORION CORP.,
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` Defendants.
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`C.A. No. 18-303-RGA
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`(PROPOSED) FIRST AMENDED COMPLAINT
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`Plaintiff Baxter Healthcare Corporation (“Baxter”), through counsel, hereby files its First
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`Amended Complaint against Hospira, Inc. (“Hospira”) and Orion Corp. (“Orion”) (collectively,
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`“Defendants”), and alleges as follows:
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`I.
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`NATURE OF THE SUIT
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`1.
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`This is a civil action brought by Baxter against Defendants seeking declaratory
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`judgment, treble damages, and other relief for harms arising out of Defendants’ unlawful misuse
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`of an invalid patent. United States Patent No. 6,716,867 (the “’867 Patent”) is invalid as obvious,
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`as originally determined by the United States District Court for the District of New Jersey in
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`Civil Action No. 3:09-cv-04591 (2012). Despite the invalidity of the ’867 Patent, Defendants
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`have misused the ’867 Patent to unlawfully exclude generic competition from the market for
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`dexmedetomidine hydrochloride injection, 200 mcg base/50mL and 400 mcg base/100mL, a
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`drug manufactured and marketed by Defendants under the brand name Precedex. As alleged
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`below, Defendants devised a scheme using a variety of illegal and deceptive acts to unlawfully
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`preclude or delay generic competition for Precedex. Through these acts, Defendants have
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`unlawfully monopolized and attempted to monopolize the dexmedetomidine hydrochloride
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`1
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`market in violation of numerous antitrust laws, including but not limited to the Sherman Act, 15
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`U.S.C. § 2, and the Clayton Act, 15 U.S.C. §§ 15 and 26.
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`2.
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`Specifically, Defendants have engaged in a pattern and scheme to abuse the patent
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`system and have engaged in sham litigation to restrain competition from Baxter and other
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`generic manufacturers of premix dexmedetomidine hydrochloride. Defendants’ unlawful conduct
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`includes, inter alia:
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`(a)
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`Conspiring to monopolize and restrain trade by entering into a settlement
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`agreement with Sandoz in Case No. 3:09-cv-04591 (D.N.J.) to vacate the district court’s
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`judgment declaring the ’867 Patent invalid. Vacatur of this judgment through settlement enabled
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`Defendants to improperly manipulate the use codes for the ’867 Patent and to continue
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`monopolizing the dexmedetomidine hydrochloride market by asserting against Baxter and other
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`generic manufacturers a patent that they knew was invalid. The vacatur occurred after a full
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`bench trial on the merits and while the case was awaiting oral argument at the United States
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`Court of Appeals for the Federal Circuit;
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`(b)
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`Continuing to list the ’867 Patent in the Orange Book despite knowledge
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`of the patent’s fraudulent procurement and invalidity;
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`(c)
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`Misrepresenting and improperly altering the use code for the ’867 Patent
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`to preclude generic competition despite knowing that the claims in the ’867 Patent do not extend
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`to the new use code;
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`(d)
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`Asserting the ’867 Patent against Baxter despite knowing that this patent
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`is unenforceable and invalid as obvious, and that the patent was obtained through fraudulent
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`misrepresentations; and
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`(e)
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`Filing a sham counterclaim against Baxter for infringement of the ’867
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`2
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`Patent, despite knowing that such claim is objectively baseless, asserted in bad faith, and brought
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`for an anti-competitive purpose in violation of § 2 of the Sherman Act (as interpreted in
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`Handgards Inc. v. Ethicon Inc., 743 F.2d 1282 (9th Cir. 1984)) to unlawfully restrain
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`competition in a relevant market causing antitrust injury to Baxter and other generic premix
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`dexmedetomidine hydrochloride manufacturers.
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`3.
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`Baxter seeks judgment, damages, injunctive, and other relief for Defendants’
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`unlawful conduct with respect to the ’867 Patent and monopolization of the market for premix
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`dexmedetomidine hydrochloride injection.
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`II.
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`PARTIES
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`4.
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`Baxter Healthcare Corporation is a corporation incorporated in Delaware with its
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`principal place of business at One Baxter Parkway, Deerfield, IL 60015.
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`5.
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`Upon information and belief, Hospira, Inc. is a Delaware corporation with its
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`principal place of business at 275 North Field Drive, Lake Forest, Illinois 60045.
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`6.
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`Upon information and belief, Orion Corp. is a corporation organized under the
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`laws of Finland with its principal place of business at Orionintie 1, FIN-02200 Espoo, Finland.
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`III.
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`JURISDICTION AND VENUE
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`7.
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`This First Amended Complaint arises under the Patent Laws of the United States,
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`35 U.S.C. §§ 100 et seq., the antitrust laws of the United States, 15 U.S.C. § 2, the Declaratory
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`Judgment Act, 28 U.S.C. §§ 2201-02, and the Federal Food, Drug and Cosmetic Act, 21 U.S.C.
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`§§ 301 et seq., as amended, based upon an actual controversy between the parties.
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`8.
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`This Court has subject matter jurisdiction over Baxter’s claims under 28 U.S.C.
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`§§ 1331, 1337(a), and 1338, and 15 U.S.C. § 15.
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`9.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and 15 U.S.C.
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`3
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`§ 22, at least because Hospira resides in this District and the Court may exercise personal
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`jurisdiction over Hospira.
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`10.
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`This Court has personal jurisdiction over Hospira because, among other things,
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`Hospira is a Delaware corporation that, having availed itself of Delaware’s corporate laws, is
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`subject to personal jurisdiction in Delaware.
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`11.
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`Hospira is also engaged in the sale of Precedex in interstate commerce and in this
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`judicial District.
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`12.
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`This Court has personal jurisdiction over Orion because, among other things, on
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`information and belief, Orion does business in this District by co-owning a patent covering
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`Precedex (i.e., the ’867 Patent), licensing in the United States its interest in that patent to
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`Hospira—a Delaware corporation—and receiving royalty payments from Hospira for the sale of
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`Precedex, which is sold in Delaware.
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`13.
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`This Court also has personal jurisdiction over Orion because Orion has regularly
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`and purposefully availed itself of the privileges and benefits of this forum, having brought
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`multiple suits in this District, including suits specifically alleging infringement of the ’867
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`Patent: Hospira, Inc. & Orion Corp. v. Sandoz Int’l GmbH, et al., Civ. No. 09-00665 (D. Del.);
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`Hospira, Inc. & Orion Corp. v. Aurobindo Pharma Ltd., et al., Civ. No. 14-00486 (D. Del.);
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`Hospira, Inc. & Orion Corp. v. Ben Venue Labs, Inc., Civ. No. 14-00487 (D. Del.); Hospira, Inc.
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`& Orion Corp. v. Actavis LLC et al., Civ. No. 14-00488 (D. Del.); Hospira, Inc. & Orion Corp.
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`v. Ben Venue Labs., Inc., et al., Civ. No. 14-1008 (D. Del.).
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`14.
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`Upon information and belief, the license agreement between Orion and Hospira
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`obliges Orion to participate in the enforcement or defense of the ’867 Patent with Hospira, which
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`is engaged in exploiting the patent rights in Delaware through its sale of Precedex.
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`4
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`15.
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`By repeatedly asserting infringement of the ’867 Patent in this District, Orion has
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`waived any argument that it is not subject to specific personal jurisdiction in this District for
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`actions relating to the ’867 Patent.
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`16.
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`Venue is proper in this district for Orion pursuant to 28 U.S.C. §§ 1391(b) and
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`1400(b) and 15 U.S.C. § 22 because, inter alia, Orion is a corporation organized and existing
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`under the laws of Finland and is subject to personal jurisdiction in this judicial District.
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`IV.
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`FACTUAL BACKGROUND
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`A.
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`The ’867 Patent
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`17.
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`On its face, the ’867 Patent, entitled “Use of Dexmedetomidine for ICU
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`Sedation,” indicates it was issued by the U.S. Patent and Trademark Office (“PTO”) on April 6,
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`2004. A copy of the ’867 Patent is attached as Exhibit A.
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`18.
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`According to records at the PTO, Hospira and Orion are co-assignees of the ’867
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`Patent.
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`19.
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`On information and belief, Hospira is the exclusive licensee in the United States
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`of Orion’s interest in the ’867 Patent.
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`20.
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`21.
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`22.
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`The ’867 Patent contains twelve claims.
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`The ’867 Patent contains two independent claims.
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`Each independent claim of the ’867 Patent recites “[a] method of sedating a
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`patient in an intensive care unit, which comprises administering to the patient an effective
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`amount of dexmedetomidine or a pharmaceutically acceptable salt therefor, wherein the patient
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`remains arousable and orientated.” (emphasis added).
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`5
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`23.
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`The ’867 Patent’s ten dependent claims incorporate the limitations of the claims
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`from which they depend. Thus, all claims of the ’867 Patent require “[a] method of sedating a
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`patient in an intensive care unit.”
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`24.
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`No portion of the ’867 Patent claims any method of use relating to administering
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`the drug to patients in surgical or other procedures.
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`B.
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`Statutory and Regulatory Background
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`25.
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`The Food and Drug Administration (“FDA”) regulates the approval, manufacture,
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`and commercial sale of pharmaceuticals in the United States pursuant to the Federal Food, Drug
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`and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (the “Act”). Under the Act, a manufacturer who
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`creates a new, pioneer drug must obtain the approval of FDA to sell the new drug by filing a
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`New Drug Application (“NDA”). An NDA must include specific data concerning the safety and
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`efficacy of the drug, as well as any information on applicable patents. A manufacturer may only
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`promote a drug for uses that are approved by FDA.
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`26.
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`In 1984, Congress passed the Hatch-Waxman Amendments to the Act, which
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`permit a generic drug manufacturer to file an Abbreviated New Drug Application (“ANDA”)
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`that expedites the drug approval process. Rather than go through full clinical trials, as a branded
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`drug is required to undertake, an ANDA filer need only show that its drug is bioequivalent (as
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`defined by FDA) to a branded drug that FDA has already approved.
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`27.
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`Section 355(b)(1) of Title 21 of the United States Code mandates that the sponsor
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`of a branded drug submit in its NDA “the patent number and the expiration date of any patent
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`which claims the drug for which the [brand] submitted the [NDA] or which claims a method of
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`using such drug.” 21 U.S.C. § 355(b)(1). Once an NDA is approved, the brand company
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`provides the following information: (1) whether the patent claims one or more approved methods
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`of using the drug product for which use approval is being sought and a description of each
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`pending method of use or related indication and related patent claim of the patent being
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`submitted; and (2) identification of the specific section of the approved labeling for the drug
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`product that corresponds to the method of use claimed by the patent submitted. 21 C.F.R.
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`§ 314.53(c)(2)(ii)(P), (b)(1).
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`28.
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`This patent description submitted by the brand company is known as a “use
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`code.” See 21 C.F.R. § 314.53(c)(2)(ii)(P)(3), (e). The brand company must attest under penalty
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`of perjury that its submission of the patent information, including the use code, to FDA is “true
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`and correct.” Id. § 314.53(c)(2)(ii)(R). FDA does not attempt to verify the accuracy of the use
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`codes that brand companies supply, but relies on the certification of the brand company for its
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`accuracy and specificity, and simply publishes the codes, along with the corresponding patent
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`numbers and expiration dates, in a publication entitled “Approved Drug Products with
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`Therapeutic Equivalence Evaluations,” known as
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`the “Orange Book.” 21 U.S.C.
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`§ 355(j)(7)(A)(iii).
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`29.
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`To obtain FDA approval of an ANDA (and thus the right to sell a generic version
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`of a brand-name drug), a generic manufacturer must certify that the generic drug addressed in its
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`ANDA does not violate any patent listed in the Orange Book as claiming the brand-name drug.
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`30.
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`If an ANDA applicant seeks approval to market a drug for which one or more
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`method-of-use patents are listed in the Orange Book but does not seek approval for uses claimed
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`by such patents, the ANDA may include a “section viii” statement to that effect. 21 U.S.C.
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`§ 355(j)(2)(A)(viii). With a section viii statement, the ANDA applicant must “carve out” all
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`references to the patented uses from its proposed label. FDA will not accept a section viii
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`statement if the ANDA applicant’s proposed label contains the use identified in the description in
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`7
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`the use code. The existence of method-of-use patents claiming uses omitted from the proposed
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`label will thus not act as a barrier to FDA’s approval of the ANDA. Alternatively, the ANDA
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`applicant may address the method-of-use patent with a certification of noninfringement or
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`invalidity under 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (“Paragraph IV Certification”), in which event
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`the filing of an infringement suit by the reference listed drug holder would delay FDA approval.
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`31.
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`ANDA applicants are not subject to any 30-month stay of approval, or any 180-
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`day exclusivity period, with respect to any patent(s) addressed via a section viii statement.
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`C.
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`Hospira’s NDA And The ’867 Patent
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`32.
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`Hospira first began marketing Precedex in 1999, following FDA approval of its
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`New Drug Application No. 021038 for dexmedetomidine hydrochloride, a sedative delivered by
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`injection. When approved in 1999, the only available form of Precedex was a concentrate that
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`required dilution before administration.
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`33.
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` Two “ready to use” (“premix”) forms of Precedex were approved in supplements
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`to NDA No. 021038 in March 2013, and a third was approved in November 2014.
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`34.
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`As approved by FDA on December 17, 1999, NDA No. 021038 permitted
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`Precedex to be used for the sedation of initially intubated and mechanically ventilated patients in
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`an intensive care unit (“ICU”) setting (the “ICU Indication”). Hospira subsequently obtained
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`FDA approval for a second indication involving sedation of non-intubated patients prior to
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`and/or during surgical and other procedures (the “Procedural Indication”).
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`35.
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`In connection with NDA No. 021038, Hospira certified that the ’867 Patent, U.S.
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`Patent No. 5,344,840 (the “’840 Patent”), and U.S. Patent No. 4,910,214 (the “’214 Patent”) all
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`claimed either Precedex or a method of use for Precedex. As a result, FDA listed these patents in
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`the Orange Book.
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`8
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`36.
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`According to the Orange Book, the ’840 Patent expired on September 6, 2011,
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`and the ’214 Patent expired on July 15, 2013, with an associated pediatric exclusivity period
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`expiring on January 15, 2014.
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`37.
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`The ’867 Patent is the only unexpired patent listed in the Orange Book for the
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`concentrate form of Precedex and is among the patents listed for the premix forms of Precedex.
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`38.
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`The ’867 Patent expires on March 31, 2019, and an associated pediatric
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`exclusivity period will expire on October 1, 2019.
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`D.
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`The ’867 Patent Has Been Adjudicated to Be Invalid
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`39.
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`Based upon information from prior proceedings, Sandoz Inc. submitted the first
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`ANDA for generic dexmedetomidine injection, 100 mcg base/mL (ANDA No. 091465) on April
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`7, 2009. ANDA No. 091465 was for a generic version of Precedex concentrate, not Precedex
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`premix.
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`40.
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`Defendants asserted the ’214 Patent and ’867 Patent against Sandoz International
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`GmbH and Sandoz Inc. in response to Sandoz’s filing of ANDA No. 091465. See Hospira, Inc.
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`& Orion Corp. v. Sandoz Int’l GmbH et al., No. 3:09-cv-04591 (D.N.J.).
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`41.
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`On April 30, 2012, Judge Cooper, following a full bench trial, held the ’867
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`Patent obvious under 35 U.S.C. § 103 and therefore invalid. Upon consideration of the Graham
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`factors, the court concluded that all claims of the ’867 Patent “would have been obvious to a
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`person of ordinary skill in the art by 1998.” ECF No. 380, at 61-62, Case No. 3:09-cv-04591
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`(May 4, 2012).
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`42.
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`Specifically,
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`the district court found
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`that “[t]he prior art
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`taught
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`that
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`dexmedetomidine sedated patients in a dose-dependent manner but that those patients were
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`easily awakened and could participate in study assessments (i.e., they were orientated).
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`9
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`Moreover, this effect was seen not only in healthy patients but in sick patients awaiting major
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`vascular surgery. Therefore, a person of ordinary skill in the art would have had a reasonable
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`expectation of success in achieving and maintaining arousable sedation in intensive care
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`patients.” Id. at 73. In summary, the court noted that it “finds clear and convincing evidence that
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`a person of ordinary skill in 1998 would have thought the ’867 Patent subject matter as a whole
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`obvious in light of the prior art.” Id. at 75. The court issued this ruling even after expressly
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`considering the high burden of proof Sandoz had to meet. Id. Indeed, the court stated that to find
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`the ’867 Patent nonobvious would necessitate deviating from Supreme Court precedent. Id.
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`43.
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`After the district court’s judgment of invalidity, Hospira negotiated with Sandoz
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`and induced Sandoz to drop its suit in exchange for Hospira permitting Sandoz to enter the
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`market with is generic dexmedetomidine product on December 26, 2014. (Hospira, Inc. 2013 10-
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`K at 15.) In exchange for this early entry, Hospira requested Sandoz to join it in moving the
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`district court to vacate the invalidity judgment in December 2013. This allowed Sandoz to share
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`in the exclusivity of the ’867 Patent and enjoy a period as the sole generic dexmedetomidine
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`product. The district court granted the parties’ motion.
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`44.
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`Hospira sought to vacate the district court’s invalidity judgment to maintain an
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`illegal and anticompetitive monopoly on dexmedetomidine hydrochloride.
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`45.
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`Even though the ’867 Patent had been adjudicated to be invalid, and even though
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`Hospira never obtained a reversal of that adjudication on the merits, Hospira continued to
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`maintain the patent listed in the Orange Book to preclude generic competition.
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`46.
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`Hospira further has continued to assert the ’867 Patent against Baxter and other
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`generic dexmedetomidine hydrochloride manufacturers to prevent these manufacturers from
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`entering the market.
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`10
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`E.
`
`The ’867 Patent Use Code Amendment
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`47.
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`Hospira’s vacatur of the Sandoz judgment allowed Defendants to perpetuate an
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`anticompetitive scheme to preclude generic dexmedetomidine hydrochloride manufacturers from
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`entering the market.
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`48.
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`Following vacatur, Hospira improperly and illegally manipulated the use code for
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`the ’867 Patent to protect an unpatented indication of Precedex.
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`49.
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`On May 6, 2004, Hospira submitted the ’867 Patent for listing in the Orange
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`Book, with use code U-572: “intensive care unit sedation.” At the time of this submission,
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`Hospira’s belief was that the consequence of administering Precedex was “to provide a method
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`of sedating a patient in an intensive care unit wherein the patient remains arousable and
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`orientated, and accordingly that U.S. Patent No. 6,716,867 claims an approved use of the drug
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`product.”
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`50. When Hospira submitted the ’867 Patent with the use code U-572, Precedex was
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`only approved for sedation of initially intubated and mechanically ventilated patients in an ICU
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`setting.
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`51.
`
`On October 17, 2008, Hospira gained FDA approval for the second indication:
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`sedation of non-intubated patients prior to and/or during surgical and other procedures.
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`52.
`
`On November 21, 2008, Hospira submitted the ’840 Patent for listing in the
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`Orange Book, with use code U-912: “Sedation of non-intubated patients prior to and/or during
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`surgical and other procedures.” Due to its expiry, the ’840 Patent is no longer listed in the
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`Orange Book for NDA No. 021038.
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`53. When Hospira submitted the ’840 Patent for listing, Hospira did not make any
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`amendments to the use code for the ’867 Patent.
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`11
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`54.
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`Thus, from September 6, 2011 until January 2014, Hospira made no claim that
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`any patent covered the use of dexmedetomidine hydrochloride for sedation during surgical
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`procedures (i.e., the Procedural Indication).
`
`55.
`
`Hospira stated as much in federal court in the Sandoz case (No. 3:09-cv-04591).
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`In Sandoz, Hospira argued that the ’867 Patent related only to the ICU Indication, and that there
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`was no valid patent that covered the Procedural Indication. During closing arguments at trial on
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`or about April 5, 2012, Hospira argued that Sandoz had copied the ’867 Patent by choosing “only
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`to seek approval for the ’867 patent indication.” When the court asked whether the “other
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`approved label use” is “the subject of a patent application,” Hospira stated that “the other
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`approved label use is related to the perioperative use in the ’840 patent, which is now expired, so
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`the ’867 patent is the patent for ICU sedation.” Even more explicitly, the court asked Hospira to
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`confirm that “there’s no patent on the second approved use as distinguished from the compound
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`itself,” to which Hospira represented: “Not on the method of use, that’s right.” ECF No. 397,
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`Case No. 3:09-cv-04591, at 2089-90. Instead, Hospira’s exclusivity was based upon the patent
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`for the underlying drug itself—the ’214 Patent.
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`56.
`
`Hospira understood that ANDA applicants were permitted to submit applications
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`for which indications otherwise covered by patents or other exclusivities are omitted pursuant to
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`21 U.S.C. § 355(j)(2)(A)(viii). As such, these applicants would be immediately eligible for final
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`marketing approval, regardless of the existence and listing of the ’867 Patent and regardless of
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`any marketing exclusivity held by third parties.
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`57.
`
`To prevent the erosion of its Precedex profits through competition with lower-
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`priced, non-infringing generic alternatives, Hospira deceptively manipulated the ministerial
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`procedures for use code submission for the ’867 Patent. On or about January 6, 2014, Hospira
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`12
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`sought to amend the ’867 Patent use code to “intensive care unit sedation, including sedation of
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`non-intubated patients prior to and/or during surgical and other procedures” (U-1472), even
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`though the claims of the ’867 Patent provided no basis to do so. Hospira deliberately took this
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`action to prevent FDA from “improperly approv[ing] a section viii statement” for generic
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`dexmedetomidine products. (January 24, 2014 Comment from Hospira, Inc. at 6-7, Docket No.
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`FDA-2014-N-0087.)
`
`58.
`
`Hospira deliberately altered the use code to maintain its monopoly over both
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`FDA-approved indications of Precedex, even though the claims of the ’867 Patent cover only
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`one such use—the ICU Indication. Hospira further performed this action despite knowing that
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`Judge Cooper had previously declared the ’867 Patent invalid.
`
`59.
`
`In submitting the altered use code, Hospira has falsely and improperly represented
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`to FDA that the ’867 Patent covers uses for which Hospira has admitted elsewhere that it has no
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`patent protection and for which Hospira has no lawful right to exclude potential competitors.
`
`60.
`
`Hospira was neither required nor directed by FDA to change its use code for the
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`’867 Patent.
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`61.
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`Hospira’s manipulation of its use code for the ’867 Patent was designed to—and
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`has had the effect of—delaying generic competition to Precedex for both the concentrate and
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`premix forms.
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`62.
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`Hospira knew that the representations that it made in submitting the use code for
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`the ’867 Patent in the Orange Book listing for Precedex were inconsistent with representations it
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`had previously made to the District of New Jersey in the Sandoz case and deliberately
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`misleading.
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`Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 14 of 57 PageID #: 1223
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`63.
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`Hospira knew and intended that its manipulation of the use code could have the
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`effect of requiring FDA to push potential section viii filers, like Baxter, into certifications under
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`Paragraph IV instead, which changes would have made them subject to, inter alia, the Hatch-
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`Waxman notice provisions, the 30-month Hatch-Waxman stay of ANDA approval, and third-
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`party exclusivities and would thereby have prevented them from coming to market for a
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`substantial period.
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`64.
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`Indeed, Hospira’s alteration of the use code would effectively prohibit section viii
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`carve-outs entirely with respect to the ’867 Patent, which was Hospira’s stated purpose.
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`65.
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`On or about January 8, 2014, FDA, in accordance with the ministerial manner in
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`which it implements patent use code information, changed the use code for the ’867 Patent to U-
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`1472 as Hospira requested.
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`66.
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`In light of Hospira’s use code change, FDA issued a “Dear Dexmedetomidine
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`Hydrochloride Injection NDA/ANDA Applicant” letter on January 15, 2014 and established
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`Public Docket No. FDA-2014-N-0087 to solicit comments on certain legal and regulatory issues
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`pertaining to Precedex, including whether “the breadth of the new use code description for the
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`’867 patent foreclose[s] ANDA applicants from gaining approval for any of the approved
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`indications (or for any subset of those indications) before the ’867 patent expires.” In other
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`words, FDA asked whether Hospira’s revised use code prevented a section viii carve-out of the
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`’867 Patent.
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`67.
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`In responding to this request, Hospira reiterated the validity of the ’867 Patent
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`(despite the prior contrary holding in the Sandoz litigation) and argued that FDA lacked authority
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`to conduct any evaluation of the patents at issue, the implication of the claimed use codes, or the
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`overlap between Precedex and any generic manufacturer filing a section viii statement. It
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`14
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`Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 15 of 57 PageID #: 1224
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`concluded by asserting that “any applicant seeking to market a generic version of PRECEDEXTM
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`. . . must file a Paragraph IV certification.” (Comment from Hospira, Inc. at 9, Docket No. FDA-
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`2014-N-0087). Hospira’s earlier conduct, however, shows that it did not believe these arguments
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`to be true.
`
`68.
`
`Eight months later, after considering comments from Hospira, Sandoz, and
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`numerous other interested parties, on August 18, 2014, FDA issued a determination in Public
`
`Docket No. FDA-2014-N-0087 concluding that “regardless of whether the original use code or
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`the revised use code applies, the agency can approve an ANDA that submits a ‘section viii’
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`statement and omits labeling that discloses the protected use (as identified by Hospira). FDA
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`further concludes that such omissions do not render the drug less safe or effective for the
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`remaining non-protected conditions of use.”
`
`69.
`
`FDA
`
`then approved several generic drug applications
`
`for concentrate
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`dexmedetomidine hydrochloride that carved out use of the product in an intensive care unit (i.e.,
`
`the ICU Indication) but permitted use for sedation of non-intubated patients prior to and/or
`
`during surgical and other procedures (i.e., the Procedural Indication).
`
`70.
`
`Rather than accept FDA’s decision, Hospira filed suit in federal court, seeking to
`
`block FDA’s approval of one of the generic applicants, Par Sterile. See Hospira, Inc. v. Burwell
`
`et al., Case No. 8:14-cv-02662-GJH (D. Md.). This suit relied on the argument that the invalid
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`’867 Patent should block Par Sterile’s entry to the market for non-patented uses, despite Hospira
`
`previously telling the District of New Jersey in the Sandoz case that the ’867 Patent had no
`
`relation to surgical uses. Hospira argued that “the section viii statement route is unavailable here
`
`because there are no approved uses of the drug which are not covered by, or do not overlap with,
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`Hospira’s patented methods of use” and “[t]here is an obvious overlap between the approved
`
`15
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`Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 16 of 57 PageID #: 1225
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`indications and Hospira’s ’867 patent.” ECF No. 2, Case No. 8:14-cv-02662-GJH, at 16. The
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`United States District Court for the District of Maryland rejected Hospira’s argument and entered
`
`summary judgment against Hospira.
`
`71.
`
`As a result, both FDA and the District of Maryland have found that generic drug
`
`manufacturers may carve out the ICU Indication and be approved for the Procedural Indication
`
`without running afoul of the ’867 Patent.
`
`F.
`
`Baxter’s ANDA Product
`
`72.
`
`Celerity Pharmaceuticals, LLC (“Celerity”) submitted and later transferred to
`
`Baxter ANDA No. 208532 for a proposed drug product containing dexmedetomidine
`
`hydrochloride, 200 mcg base/50 mL and 400 mcg base/100 mL. Baxter’s ANDA seeks FDA
`
`approval for the commercial manufacture, use, importation, offer for sale, and sale of generic
`
`dexmedetomidine HCl, 200 mcg base/50 mL and 400 mcg base/100 mL (the “Baxter ANDA
`
`Product”).
`
`73.
`
`In ANDA No. 208532, Baxter/Celerity filed a Paragraph IV Certification under
`
`21 U.S.C. § 355(j)(2)(A)(vii)(IV), certifying that United States Patent Nos. 8,242,158;
`
`8,338,470; and 8,455,527 (collectively, the “Glass Patents”) would not be infringed by the
`
`manufacture, use, or sale of the Baxter ANDA Product.
`
`74.
`
`In ANDA No. 208532, Baxter/Celerity included a section viii carve-out statement
`
`pursuant to 21 U.S.C. § 505(j)(2)(A)(viii) and 21 C.F.R. § 314.94(a)(12)(iii)(A) that the method
`
`of use recited in the ’867 Patent does not claim any indication for which Baxter’s ANDA seeks
`
`approval.
`
`75.
`
`Baxter and Celerity followed longstanding FDA guidance and relied on FDA’s
`
`specific decision regarding the ’867 Patent when they submitted the section viii carve-out
`
`16
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`Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 17 of 57 PageID #: 1226
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`statement for the Baxter ANDA Product, purposefully excluding Precedex’s ICU Indication to
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`avoid infringing the ’867 Patent.
`
`76.
`
`In accordance with 35 U.S.C. § 355(j)(2)(B) and 21 C.F.R. § 314.95,
`
`Baxter/Celerity served Hospira with a Notice Letter on or about June 6, 2016, informing Hospira
`
`of Baxter’s ANDA seeking approval to engage in the commercial manufacture, use, importation,
`
`offer for sale, or sale of Baxter’s ANDA Product before the expiration of the ’867 Patent. The
`
`Notice Letter included a Paragraph IV Certification for the Glass Patents.
`
`77.
`
`The Notice Letter further informed Hospira that Baxter’s ANDA Product does not
`
`infringe the ’867 Patent because of the section viii carve-out statement.
`
`78.
`
`79.
`
`Hospira did not sue Baxter on its Notice Letter.
`
`Shortly after Baxter submitted ANDA No. 208532, it expected to receive full
`
`FDA approval in late January 2018.
`
`80.
`
`However, because Hospira continued to maintain the ’867 Patent in the Orange
`
`Book despite knowledge of its invalidity, a first applicant filed a Paragraph IV Certification as to
`
`this and other related patents and obtained a 30-month period of exclusivity for generic premix
`
`dexmedetomidine hydrochloride.
`
`81.
`
`The first applicant did not meet the statutory deadline to obtain tentative approval
`
`of its ANDA from the FDA. Despite the expiration of the statutory exclusivity period, FDA
`
`informed Baxter that the first applicant had not forfeited its exclusivity.
`
`82.
`
`As a result, FDA only tentatively approved Baxter’s ANDA in January 2018. On
`
`August 21, 2018, FDA granted final approval for Baxter’s ANDA.
`
`83.
`
`This chain of events, beginning with Hospira’s improper listing of the ’867 Patent
`
`in the Orange Book, delayed Baxter’s market entry for approximately eight months.
`
`17
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`Case 1:18-cv-00303-RGA Document 56 Filed 10/15/18 Page 18 of 57 PageID #: 1227
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`84.
`
`Had Defendants not conspired to vacate the invalidity judgme