Background
United Therapeutics Corp. markets Remodulin, an injectable form of treprostinil used to treat pulmonary arterial hypertension. After Sandoz received approval to market generic injectable treprostinil, Sandoz and its marketing partner, RareGen, alleged that United Therapeutics impeded the generic launch by obtaining control over cartridges needed to administer the drug subcutaneously and restricting their use to Remodulin. Sandoz launched an intravenous version in March 2019 but could not launch its subcutaneous version until an alternative cartridge received FDA approval in 2021.
Sandoz and RareGen sued United Therapeutics and cartridge manufacturer Smiths Medical, asserting federal and state antitrust claims, state-law tort claims, and—after denial of preliminary relief—a claim that United Therapeutics breached a 2015 patent settlement agreement promising not to prevent, delay, limit, or restrict Sandoz’s launch. Smiths later settled. The district court dismissed the antitrust and tort claims, granted Sandoz summary judgment on contract liability, admitted Sandoz’s damages expert, and awarded Sandoz $61,643,251 after a bench trial on damages.
The Court’s Holding
The Third Circuit held that the settlement agreement did not unambiguously prohibit United Therapeutics’ cartridge restrictions. Although two provisions broadly barred interference with Sandoz’s launch, other language excluded rights to United Therapeutics’ technology, pumps, and delivery equipment, and the agreement’s patent-settlement context reasonably supported United Therapeutics’ narrower interpretation. The court therefore reversed summary judgment on contract liability, vacated the judgment and damages award, and remanded for a trial on the parties’ intended meaning.
The court affirmed dismissal of the Sherman Act and North Carolina unfair-and-deceptive-trade-practices claims. Even assuming substantial market foreclosure and anticompetitive effects, United Therapeutics established procompetitive justifications: its investment kept the cartridges in production, increased output, protected supply for Remodulin patients, and discouraged free riding. Plaintiffs did not establish a viable, substantially less restrictive alternative providing comparable benefits. The court nevertheless revived the New Jersey tortious-interference claim because conduct may be malicious, fraudulent, or dishonest without violating federal antitrust law, requiring separate analysis on remand.
The panel also affirmed the denial of United Therapeutics’ Daubert motion. Although damages expert Dr. Anupam Jena lacked some information about the authorship and business use of RareGen’s forecast, he tested its reasonableness against numerous other forecasts and explained why he considered it reliable. Remaining evidentiary and damages challenges were dismissed as moot.
Key Takeaways
- Broad launch-protection language in a pharmaceutical patent settlement may be ambiguous when the agreement elsewhere excludes rights to associated devices and third-party technology.
- An exclusive-dealing restraint survives rule-of-reason scrutiny when supported by legitimate supply, output, and investment-protection benefits that plaintiffs fail to show could be achieved through a viable, substantially less restrictive alternative.
- Failure of an antitrust claim does not automatically defeat a New Jersey tortious-interference claim based on allegedly malicious, fraudulent, or dishonest conduct.
Why It Matters
The decision eliminates Sandoz’s $61.6 million judgment unless it proves at trial that the settlement agreement’s launch protections covered United Therapeutics’ cartridge restrictions. It also underscores the importance of reading pharmaceutical settlement provisions in the context of the entire agreement, particularly express exclusions for delivery devices and third-party technology.
At the same time, the ruling preserves a potential state-law path to liability even where exclusive arrangements withstand federal antitrust review. The opinion also holds that a party’s proper adoption of a co-party’s appellate arguments under Federal Rule of Appellate Procedure 28(i) does not count against the adopting party’s word limit.