Parabellum funding proposed Canadian class action against generic drug manufacturers

Parabellum is funding a proposed Canadian class action against over 50 generic drug manufacturers. The proposed class action alleges that the defendants conspired to “allocate the market, fix prices and maintain the supply of generic drugs” contrary to the Competition Act, and claims damages of $2.75 billion.

The plaintiff in the case, Kathryn Eaton, represents a class of persons who purchased generic drugs in Canada between 2012 and 2020. The defendants are alleged to be responsible for most of the generic drug sales in Canada.

In her statement of claim, the plaintiff alleges that the defendants have conspired to allocate among themselves a “fair share” of sales of generic drugs. This conspiracy is alleged to also include price fixing, market allocation, customer allocation and the restriction of supply, contrary to section 45 of the Competition Act. Among other things, these anti-competitive activities are estimated to have contributed to prices for generic drugs in Canada exceeding the median generic drug price of seven comparator countries by 30% during the class period. The plaintiff further alleges that some of the defendants contravened section 46 of the Competition Act by implementing directives, instructions, intimations of policy or other communications for the purpose of giving effect to a foreign conspiracy.

The purported conspiracy in Canada is said to be part of a broader North American conspiracy that has been the subject of an ongoing investigation by U.S. state attorneys general and the U.S. Department of Justice. As of the date of the fresh as amended statement of claim, that investigation had resulted in the filing of two civil complaints by state attorneys general as well as agreements by four of the defendants to pay fines.

Pursuant to a litigation funding agreement, Parabellum is entitled to a return of 10% of the claim proceeds, after Parabellum has first been reimbursed for any funds advanced under the agreement. This 10% fee is subject to a cap of between $5 million and $45 million, depending upon when the overall claim proceeds are received. The extent of funding to be advanced under the LFA is expected to be in the range of several millions of dollars.

Keep Reading

Before You Go

Never miss a thing in the litigation finance market.