High court declines to hear case on tamoxifen pricing

WASHINGTON - The Supreme Court yesterday refused to consider a lawsuit alleging that the pharmaceutical companies AstraZeneca P.L.C. and Barr Laboratories Inc. conspired to monopolize the market for a drug used to treat breast cancer.

The justices, in a busy day for business-related cases, agreed to consider whether federal approval of medical devices shielded manufacturers from product-liability lawsuits in state courts. The court put off a decision on the Enron scandal and refused to hear an appeal by Lorillard Tobacco Co. in a case involving counterfeit goods.

In the AstraZeneca case, consumers who filed the suit had asked the justices to consider when an agreement not to market a generic drug was a violation of federal law.

U.K.-based AstraZeneca has U.S. headquarters near Wilmington and employs more than 4,500 people in northern Delaware.

The U.S. Court of Appeals for the Second Circuit upheld a federal judge who had concluded that an agreement between AstraZeneca and Barr did not restrain trade in violation of federal law.

The Bush administration had urged the court not to step into the case, even though the government said the appeals court had failed to apply the correct legal standard in analyzing the matter.

In 1992, a federal judge ruled that AstraZeneca's patent for the drug tamoxifen was invalid. The decision came in a dispute between AstraZeneca and Barr, which wanted to market a generic version of tamoxifen.

Barr abandoned its successful challenge in exchange for the right to begin selling a competing tamoxifen product under a distributorship agreement with AstraZeneca, well before the expiration of the patent. Barr also received a $21 million payment and AstraZeneca also agreed to pay $45 million over 10 years to Barr's intended supplier.

Attorneys for the consumers said the arrangement resulted in tamoxifen remaining "a single-source, monopoly product," with Barr distributing unbranded tamoxifen at a price 5 percent less than AstraZeneca's Nolvadex brand.

Generic drugs, attorneys for the consumers alleged, usually are priced 30 percent to 80 percent below brand-name products.

AstraZeneca shares closed down 25 cents at $51.00 on the New York Stock Exchange. Barr shares closed up 44 cents at $51.25 on the NYSE.

Also yesterday, the justices agreed to hear a case involving lawsuits against makers of medical devices. Most federal appeals courts have ruled that the Food and Drug Administration's regulation of medical devices preempts such lawsuits.

Some confusion on the issue remains, however, which may have prompted the justices to take the case. In 2004, the Bush administration argued against the suits - a switch from the position the Clinton administration had taken.

"When even the federal government can't make up its mind on the plain meaning of the statute, it shows the need for an authoritative voice," said Allison Zieve, an attorney for the plaintiffs in the case.

Zieve represents a New York couple, Charles and Donna Riegel, who sued Medtronic Inc. when its Evergreen balloon catheter burst during Charles Riegel's angioplasty. The balloon catheter is used to open patients' clogged arteries.

The justices also refused to hear an appeal by Lorillard Tobacco, a subsidiary of New York-based Loews Corp., in a trademark-infringement case that some business groups considered critical to the fight against counterfeit goods.

The case involved the sale of counterfeit Newport cigarettes by a small retailer in Denver. Lorillard sought an injunction against the retailer, but was turned down by the federal courts. The company argued that the federal appeals court had made it too difficult to take action against retailers that sold counterfeit goods.

Finally, the justices put off deciding on the Enron scandal, taking no action in a securities-fraud case with billions of dollars at stake for victimized investors.

The case asks whether Enron Corp. shareholders can pursue a lawsuit against Wall Street investment banks that did business with the Texas energy company.

The justices already have agreed to consider a similar suit accusing two equipment manufacturers, Motorola Inc. and a unit of Cisco Systems Inc., of colluding with cable TV provider Charter Communications Inc. to deceive investors.

At issue in both cases is whether shareholders can collect damages from investment banks, attorneys and other parties that have aided fraud by their corporate clients.