Opposition Brief — Sanofi-Aventis U.S., LLC, Petitioner v. Mylan, Inc., et al.

No. 22-628

In the Supreme Court of the United States

__________

SANOFI-AVENTIS U.S. LLC, PETITIONER

v.

MYLAN INC. AND MYLAN SPECIALTY, LP

__________

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

__________

BRIEF IN OPPOSITION TO CERTIORARI

__________

MICHAEL W. MCCONNELL

Wilson Sonsini

Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304

(650) 493–9300

CONSTANDINOS HIMONAS

Wilson Sonsini

Goodrich & Rosati, P.C.

15 West South Temple

Salt Lake City, UT 84101

(801) 401-8510

STEFFEN N. JOHNSON

Counsel of Record

KEITH KLOVERS

KELSEY J. CURTIS

Wilson Sonsini

Goodrich & Rosati, P.C.

1700 K Street, N.W.

Washington, DC 20006

(202) 973–8800

sjohnson@wsgr.com

Counsel for Respondents

QUESTION PRESENTED

Whether the Tenth Circuit correctly affirmed the

district court’s factbound summary judgment decision

that, on this record, there is no genuine dispute that

Sanofi was not an equally efficient competitor, was

not actually foreclosed from the relevant market, and

did not exit the market for any reason attributable to

Mylan, but rather on account of an FDA recall related

to safety concerns with Sanofi’s product.

ii

RULE 29.6 STATEMENT

The parent company of Mylan Inc. and Mylan

Specialty, LP is Viatris Inc., a publicly held company.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ........................................... i

RULE 29.6 STATEMENT ........................................... ii

TABLE OF AUTHORITIES ........................................ v

INTRODUCTION ........................................................ 1

STATEMENT............................................................... 3

A. The parties and epinephrine auto-injectors ..... 4

B. Industry structure............................................. 4

C. Competition between EpiPen and Auvi-Q ....... 6

D. The FDA Class I recall...................................... 8

E. The district court’s decision .............................. 8

F. The court of appeals’ decision ......................... 14

REASONS FOR DENYING THE PETITION .......... 17

I. Sanofi’s petition for certiorari rests on a host

of false factual premises, to the point that its

“question presented” is not even presented. ....... 17

A. The undisputed record shows that Sanofi

could compete for business even though it

was not an equally efficient rival. .................. 18

B. The undisputed record shows that Sanofi

was not foreclosed from the epinephrine

auto-injector market. ...................................... 20

C. The undisputed record shows that an FDA

recall, not Mylan, caused Sanofi’s exit from

the market. ...................................................... 26

II. Sanofi’s alleged circuit split is not presented

on these facts and in all events is overstated...... 28

iv

III.Sanofi’s other attempts to demonstrate the

importance of this case are unconvincing. .......... 33

IV. Numerous other independent reasons make

this case inappropriate for certiorari................... 34

CONCLUSION .......................................................... 37

v

TABLE OF AUTHORITIES

Page(s)

Cases

Aerotec Int’l, Inc. v. Honeywell Int’l, Inc.,

836 F.3d 1171 (9th Cir. 2016) .............................. 21

Allied Orthopedic Appliances Inc. v. Tyco

Health Care Grp. LP,

592 F.3d 991 (9th Cir. 2010) ................................ 31

Aspen Skiing Co. v. Aspen Highlands

Skiing Corp.,

472 U.S. 585 (1985) .............................................. 18

Barry Wright Corp. v. ITT Grinnell Corp.,

724 F.2d 227 (1st Cir. 1983) ........................... 20, 31

Brooke Grp. Ltd. v. Brown & Williamson

Tobacco Corp.,

509 U.S. 209 (1993) .............................................. 29

Cascade Health Sols. v. PeaceHealth,

515 F.3d 883 (9th Cir. 2008) ..................... 29, 31-33

Concord Boat Corp. v. Brunswick Corp.,

207 F.3d 1039 (8th Cir. 2000) ............. 11, 29, 32-33

Conwood Co., L.P. v. U.S. Tobacco Co.,

290 F.3d 768 (6th Cir. 2002) .......................... 31, 33

Eisai, Inc. v. Sanofi Aventis U.S., LLC,

821 F.3d 394 (3d Cir. 2016) ...... 10, 12, 28-29, 31-32

Hornsby Oil Co. v. Champion Spark Plug Co.,

714 F.2d 1384 (5th Cir. 1983) .............................. 21

In re Remicade Antitrust Litig.,

345 F. Supp. 3d 566 (E.D. Pa. 2018) .................... 12

Int’l Air Indus., Inc. v. Am. Excelsior Co.,

517 F.2d 714 (5th Cir. 1975) ................................ 31

vi

Leegin Creative Leather Prods., Inc. v.

PSKS, Inc.,

551 U.S. 877 (2007) .............................................. 15

LePage’s Inc. v. 3M,

324 F.3d 141 (3d Cir. 2003)

(en banc)..................................................... 16, 32-33

Marrese v. Am. Acad. Of Orthopaedic

Surgeons,

706 F.2d 1488 (7th Cir. 1983) .............................. 31

Matsushita Elec. Indus. Co. v. Zenith

Radio Corp.,

475 U.S. 574 (1986) .............................................. 14

MCI Commc’ns Corp. v. Am. Tel. & Tel.

Co.,

708 F.2d 1081 (7th Cir. 1983) .............................. 31

McWane, Inc. v. F.T.C.,

783 F.3d 814 (11th Cir. 2015) ............. 22, 26, 30-33

Minn. Ass’n of Nurse Anesthetists v.

Unity Hosp.,

208 F.3d 655 (8th Cir. 2000) ................................ 21

Morgan v. Ponder,

892 F.2d 1355 (8th Cir. 1989) .............................. 31

NicSand, Inc. v. 3M Co.,

457 F.3d 534 (6th Cir. 2006),

reh’g en banc granted, opinion

vacated (Nov. 22, 2006) .................................. 21, 25

Novell, Inc. v. Microsoft Corp.,

731 F.3d 1064 (10th Cir. 2013) ....................... 13-15

Ohio v. Am. Express Co.,

138 S. Ct. 2274 (2018) .................................... 15, 30

vii

Paddock Publications, Inc. v. Chicago

Trib. Co.,

103 F.3d 42 (7th Cir. 1996) .................................. 25

Race Tires Am., Inc. v. Hoosier Racing

Tire Corp.,

614 F.3d 57 (3d Cir. 2010) .............................. 25, 31

Reiter v. Sonotone Corp.,

442 U.S. 330 (1979) .............................................. 14

Roland Mach. Co. v. Dresser Indus., Inc.,

749 F.2d 380 (7th Cir. 1984) .................... 21, 25, 31

Satellite Television & Associated Res., Inc.

v. Cont’l Cablevision of Va., Inc.,

714 F.2d 351 (4th Cir. 1983) ................................ 21

Tampa Electric Co. v. Nashville Coal Co.,

365 U.S. 320 (1961) ........... 10, 14, 20, 23-24, 30, 33

United States v. Dentsply Int’l, Inc.,

399 F.3d 181 (3d Cir. 2005) ............................ 26, 32

United States v. Microsoft Corp.,

253 F.3d 34 (D.C. Cir. 2001)

(en banc) (per curiam) ..................................... 32-33

United States v. Visa U.S.A., Inc.,

344 F.3d 229 (2d Cir. 2003) .................................. 21

Verizon Commc’ns v. Law Offices of

Curtis V. Trinko,

540 U.S. 398 (2004) .............................................. 18

ZF Meritor, LLC v. Eaton Corp.,

696 F.3d 254 (3d Cir. 2012) ........... 10, 21, 26, 32-33

Statutes and Rules

Supreme Court Rule 10 ............................................. 21

viii

Other Authorities

XVIII Philip A. Areeda & Herbert H.

Hovenkamp,

Antitrust Law ¶ 1802b

(5th ed. 2022) ............................................. 20-23, 31

Pharm. Research & Mfrs. of Am.,

Follow the Dollar 3 (2017), available

at: http://phrmadocs.phrma.org/files/dmfile/ Followthe-Dollar-Report.pdf ............................................. 4

Richard A. Posner,

Antitrust Law (Chicago 2d ed. 2001) ............. 31, 34

Charles Roehrig,

Altarum, The Impact of Prescription

Drug Rebates on Health Plans and

Consumers 3 (2018) ................................................ 5

U.S. Dep’t of Justice,

Competition and Monopoly: SingleFirm Conduct Under Section 2 of the

Sherman Act 43 (2008) ......................................... 34

U.S. Food & Drug Admin.,

Recalls Background and Definitions

(July 31, 2014), available at:

https://www.fda.gov/

safety/industryguidancerecalls/recalls-background-anddefinitions ............................................................. 27

INTRODUCTION

In 2013, Sanofi, one of the world’s largest pharmaceutical companies, entered the epinephrine auto-injector market. Hoping to compete with Mylan’s EpiPen, Sanofi launched a new product called Auvi-Q.

Auvi-Q lasted about three years. In year one, Sanofi intentionally chose not to compete on price—believing Auvi-Q was a superior product that could be

differentiated based on quality and sold at a higher

price. Sanofi was wrong, and Auvi-Q got little traction. The petition relies heavily on this first year, but

without acknowledging the connection between those

poor results and Sanofi’s deliberate pricing strategy.

In year two, Sanofi changed tactics and started offering rebates and discounts. Sanofi quickly gained

access to 80% of the market and won contracts from

Mylan, including an exclusive contract with the largest intermediary, Express Scripts Inc. (ESI). Sanofi’s

petition does not discuss this successful second year.

But Sanofi cannot identify any instance when Auvi-Q

was excluded or restricted when Sanofi offered better

prices. As the court of appeals explained: “The record

supports only one conclusion: when Sanofi beat

Mylan’s prices it succeeded.” Pet.App.59a.

In year three, after an “unannounced inspection”

of a Sanofi facility (Pet.App.177a) that “follow[ed] reports that Auvi-Q was failing to inject epinephrine”

(Pet.App.13a), Sanofi went through an FDA “Class I

recall”—a legal process triggered by a “reasonable

probability” that using Auvi-Q “w[ould] cause serious

adverse health consequences or death.” Pet.App.178a.

As a result of this disastrous development, Sanofi

withdrew from the market, never to return, and later

returned the rights to Auvi-Q to its inventors. The

2

petition does not even mention the FDA recall. It is

like Hamlet without Fortinbras.

Two years after the recall, Sanofi filed this suit,

alleging an exclusive dealing claim and hoping to pin

the blame for Auvi-Q’s failure on some combination of

Mylan’s allegedly “entrenched” market share (based

on consumer familiarity with its product) and its aggressive—but above-cost—price-cutting.

Applying

settled antitrust law, both the district court and a unanimous panel of the Tenth Circuit rejected Sanofi’s

claim on summary judgment, finding that the factual

record was bereft of support for the elements of Sanofi’s claim. Specifically, Sanofi had to show that it was

excluded from a substantial part of the market despite being an equally efficient competitor. But the

record showed no such thing.

For starters, it is undisputed that Sanofi had

higher costs than Mylan, and thus was less efficient.

Pet.App.16a. To boot, Sanofi’s own expert admitted

that, even at the height of Mylan’s success, Sanofi

was kept from competing for only “31% of the U.S.

[market]”—and then only briefly. Pet.App.54a. Finally, when Sanofi began competing on price, it

quickly gained access to 80% of the market.

Pet.App.34a. Ultimately, Auvi-Q failed due to an

FDA safety recall, not because of anything Mylan did,

much less anticompetitively. As the Tenth Circuit

pointedly noted, Sanofi relied on “incomplete and

cherry-picked” facts, “mischaracterization[s] or misunderstanding[s],” and “serious evidentiary deficienc[ies].” Pet.App.58a.

One example should suffice. In hopes of showing

that Mylan’s offers “were sufficient to exclude competition regardless of the rival’s efficiency or price,” Sa-

3

nofi says that ESI, “the largest dealer in the United

States,” told it that “even a 100% discount would not

be enough” to get ESI’s business. Pet. i. The petition

repeats this anecdote no fewer than eighteen times,

insisting: “And it was not just talk.” Pet. 7. But the

following year, when Sanofi cut its prices, ESI shifted

business to Sanofi, even granting it exclusive placement on one formulary. It thus turns out that Sanofi’s poster child for exclusion was, lo and behold, “just

talk.”

Sanofi lost this case because it could not support

the elements of its exclusive dealing claim with sufficient evidence to convince any reasonable jury. In

reaching that factbound conclusion, the Tenth Circuit

did not begin to depart from this Court’s precedents

or any consensus among the lower courts. Rather, it

faithfully applied established antitrust law, treating

“the consumer welfare standard” as its “guiding

principle” and bearing “‘the interests of consumers”

foremost “in mind.’” Pet.App.46a-47a. Any minor differences among the circuits over the law of exclusive

dealing are utterly irrelevant to the outcome of this

case. Certiorari should be denied.

STATEMENT

This civil antitrust case involves epinephrine, a

drug used for emergency lifesaving treatment from

severe allergic reactions. According to Sanofi, Mylan’s

pricing of its epinephrine auto-injector allowed it to

monopolize the market for such products, in violation

of Section 2 of the Sherman Act. All four judges to

consider that claim below rejected it.

4

A. The parties

injectors

and

epinephrine

auto-

In 2007, Mylan obtained the “exclusive right” to

sell an epinephrine auto-injector (or “EAI”) called the

EpiPen in the United States. Pet.App.12a. As “the

first epinephrine auto-injector available on the market” (ibid.), it enjoyed commercial success.

Separately, Eric and Evan Edwards developed an

alternative epinephrine auto-injector called Auvi-Q.

“Auvi-Q differs from the EpiPen in that it is smaller

* * * , has a rectangular shape, a needle that retracts

(as opposed to one covered before and after injection),

and audio instructions.” Pet.App.103a. Sanofi acquired the U.S. rights to Auvi-Q, agreeing to pay a

royalty of at least 20% based on annual sales and certain “milestone payments.” Pet.App.16a, 102a. In

January 2013, Sanofi launched Auvi-Q in the United

States, where it competed with EpiPen and two other

epinephrine auto-injectors. Pet.App.104a.

B. Industry structure

As the Tenth Circuit explained, “‘[d]rug pricing is

a complex and often confusing issue, shaped by a

pharmaceutical distribution and payment system

that involves multiple transactions among numerous

stakeholders.’” Pet.App.4a-5a (quoting Pharm. Research & Mfrs. of Am., Follow the Dollar 3 (2017)).1

Although the cost of a prescription drug is typically

shared between the patient and her health insurance

plan, the process involves many transactions up and

down the supply chain. The Tenth Circuit illustrated

the nature of these payments:

Available at: http://phrma-docs.phrma.org/files/dmfile/

Follow-the-Dollar-Report.pdf

1

5

Pet.App.6a (citing Charles Roehrig, Altarum, The Impact of Prescription Drug Rebates on Health Plans

and Consumers 3 (2018)).

To keep costs down, health plans use a “managed

care” system. For prescription drugs, the centerpiece

of this system is the “formulary”—a list of covered

drugs. Pet.App.6a. As Sanofi’s former CEO testified,

plans “control the price [of drugs] by controlling access to the formulary; so the tighter the access to any

given formulary, the more [plans] have control over

price.” Ibid. (quoting deposition testimony).

To manage their formularies, most health plans

hire a Pharmacy Benefit Manager (PBM). PBMs often represent multiple plans, and thus wield “aggregate purchasing power” to “gain greater discounts

than the health plans could obtain individually.”

Pet.App.7a.

Through its formularies, a PBM uses utilization

management techniques to “nudge patients toward

cost-effective products and negotiate better pricing

from drug manufacturers.” Pet.App.8a. One such

technique is called “tiering,” whereby plans separate

similar drugs into tiers with different co-payments.

6

“The lower the tier, the lower the patient’s co-payment.” Ibid. Tiering and other utilization management techniques enable PBMs to extract price concessions from drug makers—to create “price competition

among sellers of therapeutically equivalent products”

via rebates that “lower prescription drug costs” and

help patients obtain “reduced premiums.” Pet.App.9a10a. As Sanofi’s own expert told Congress: “The way

you get low prices * * * is by the ability to exclude

drugs.” Pet.App.10a.

To that end, a PBM seeking lower prices “hold[s]

an auction” and announces: “Whoever gives me the

best price is the one I am going to buy from, and everybody else gets none of my business.” Ibid. (quoting congressional testimony of Fiona M. Scott Morton, Ph.D., Sanofi’s expert in this case)). Sanofi itself

regularly uses that very strategy. Pet.App.20a, 34a35a (citing examples involving Aetna, CVS, and ESI).

Indeed, in defending similar litigation, Sanofi has

said it is “how the entire branded pharmaceutical

industry functions.” 10.C.A.App.2037.

“Even if a PBM excludes or disadvantages a particular drug on its national formulary,” however, “the

health plan may, nevertheless, choose to cover it.”

Pet.App.7a. Therefore, because health plans often

tailor a PBM’s default formularies to fit their needs,

even “exclusive” coverage on a PBM formulary does

not confer exclusivity for any particular health plan

or patient. Pet.App.7a-11a.

C. Competition between EpiPen and Auvi-Q

“When it came time to launch [its product], Sanofi

decided to market Auvi-Q as a premium alternative

to EpiPen.” Pet.App.14a. Sanofi thus attempted to

compete mainly on quality rather than price, setting

7

a higher nominal price (the wholesale acquisition cost

or “WAC”) and offering “pretty small” rebates of 10%

or less. Pet.App.16a, 126a. As Sanofi’s executives

put it internally, “newly launched, differentiated

products with a high [cost of good]s”—by which they

meant Auvi-Q—“cannot and should not engage in a

discounting war” because it would “set off a whole

cascade of price discounts” that are “nearly impossible to withdraw.” Pet.App.17a. This pricing strategy proved to be a “mistake.” Pet.App.57a. PBMs

rejected Sanofi’s rebate offers for Auvi-Q as “inadequate,” “not competitive,” and insufficient to “match

the Mylan offer.” Pet.App.16a.

Sanofi’s pricing strategy contrasted with Mylan’s,

which answered the competition by cutting prices—

though always at levels above cost. Pet.App.44a-45a

n.7 (“Sanofi does not dispute that it cannot pass the

price-cost test”). Before the launch of Auvi-Q, Mylan

offered “single digit rebates (roughly 3%-10%)” for

EpiPen; but “[a]fter Auvi-Q’s introduction, Mylan’s

rebate offers increased significantly,” to 17% in 2014

and 36% in 2015. Pet.App.15a-16a. Consistent with

typical managed care models, PBMs “place[d] restrictions on competing products” to obtain the lowest possible prices. Pet.App.16a.

Sanofi faced three significant disadvantages in the

epinephrine auto-injector market. First, Sanofi had

an uncompetitive cost structure: Auvi-Q’s “royalty

rate was 20 percent and it had a higher [cost-ofgoods-sold] profile than other” products. Pet.App.16a

(bracket in original). Second, Sanofi incorrectly assumed that PBMs would allow more than one epinephrine auto-injector within the tiers, but most PBMs

concluded that they could cover just one. Ibid. Third,

8

Sanofi “miscalculated how much PBMs would value

Auvi-Q’s unique attributes.” Ibid.

In 2014, facing low sales, Sanofi reversed course,

deciding for the first time to compete based on price.

Auvi-Q quickly won exclusive placement on several

formularies, including two of CVS’s. Pet.App.32a.

Sanofi’s gain was Mylan’s loss, as EpiPen sales on

those CVS formularies “completely disappeared.”

Pet.App.34a. Sanofi had similar success obtaining

placement for Auvi-Q on formularies offered by ESI.

Pet.App.20a. By April 2015, Sanofi had gained access

to “80% [of the] commercial market” and “increased

its investment in the brand.” Pet.App.34a.

D. The FDA Class I recall

Sanofi’s competitive momentum came to a halt in

October 2015, when the FDA investigated a Sanofi facility, leading to a “Class I recall following reports

that Auvi-Q was failing to inject epinephrine.”

Pet.App.13a. A Class I recall involves a “reasonable

probability” that using Auvi-Q “w[ould] cause serious

adverse health consequences or death.” Ibid. Sanofi

thus withdrew Auvi-Q from the market. Sanofi “never relaunched, electing instead to return Auvi-Q’s

distribution rights” to its inventors. Ibid. Sanofi’s

petition never mentions the FDA recall or its decision

to withdraw Auvi-Q from the market.

E. The district court’s decision

In 2017, Sanofi filed suit in the District of New

Jersey. Sanofi alleged that Mylan’s rebates—which

effectively reduce the EpiPen’s total price—violated

§ 2 of the Sherman Act by monopolizing the market

for epinephrine auto-injectors. Shortly thereafter,

the Judicial Panel on Multidistrict Litigation trans-

9

ferred Sanofi’s case (and others like it) to the District

of Kansas.

Sanofi and Mylan later moved for summary judgment. In a factually detailed and well-reasoned 157page opinion, the district court granted Mylan’s motion, finding “no triable issue (1) whether Mylan engaged in anticompetitive conduct violating the Sherman Act, or (2) whether Sanofi sustained an antitrust

injury sufficient to support its Sherman Act claims.”

Pet.App.255a. Having found for Mylan on both antitrust injury and liability, the court declined to reach

Mylan’s argument that Sanofi’s damages theory failed as a matter of law. Pet.App.187a-188a. The court

denied Sanofi’s summary judgment motion as moot,

holding that Sanofi’s antitrust claims “fail[] as a matter of law” regardless of whether Mylan possessed

monopoly power. Pet.App.256a n.28.

The district court painstakingly evaluated Mylan’s

challenged conduct: (1) rebate agreements, (2) the

purported “leveraging” of “non-contestable demand”

to foreclose contestable demand, and (3) commercial

speech and its programs providing schools with donated or discounted EpiPens. First, the court held that

no reasonable jury could conclude that Mylan’s rebate

agreements violated the Sherman Act. In so holding,

the court declined to apply the price-cost test advocated by Mylan. Pet.App.192a-196a. Rather, while noting that “[e]xclusive dealing arrangements are often

entered into for entirely procompetitive reasons, and

generally pose little threat to competition,” the court

conducted a full-fledged rule of reason inquiry.

Pet.App.196a (citing cases).

The district court thus assessed the sufficiency of

the evidence as to the proportion of foreclosure “‘and

10

the probable immediate and future effects which preemption of that share of the market might have on effective competition’” in light of several quantitative

and qualitative factors.

Pet.App.198a (quoting

Tampa Electric Co. v. Nashville Coal Co., 365 U.S.

320, 329 (1961)). Citing Sanofi’s view that “exclusive

dealing cases generally present fact-intensive inquiries” (Pet.App.199a), the court explained that the

courts nonetheless routinely grant summary judgment where the record “presents no genuine factual

issue permitting a jury to find that defendant had

foreclosed a substantial volume of competition.”

Pet.App.201a. As an example, the court cited an exclusive dealing case that Sanofi defended and won on

summary judgment, Eisai, Inc. v. Sanofi Aventis

U.S., LLC, 821 F.3d 394, 407-408 (3d Cir. 2016).

Applying Tampa Electric and Third Circuit cases

such as ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254

(3d Cir. 2012), the district court identified extensive

evidence that Mylan’s rebate agreements were short

in duration, easy to terminate, and often terminated

by payors. Pet.App.203a-206a (reviewing several agreements and testimony from several PBM witnesses). The court cited “several examples where payors

renegotiated formulary coverage with both Mylan

and Sanofi in an effort to secure greater rebates.”

Pet.App.208a-209a.

The district court also carefully assessed the other

Tampa Electric factors. As to coercion, the record

was “devoid of evidence that would allow a trier of

fact to infer coercion.” Pet.App.211a. Rather, it

showed that “payors could, and often did, walk away

from Mylan’s exclusive rebate offers” (Pet.App.212a),

and that “it’s not coercion for a payor to agree to accept a lower price” (Pet.App.216a (citing Eisai, 821

11

F.3d at 399-407)). Indeed, it was often the payors

who actively solicited rebate offers, including those

offering “price protection” by automatically increasing

the rebate to offset any increase in the nominal price.

Pet.App.131a-146a, 219a.

Regarding industry practice, the court concluded

that “exclusive contracts are ‘a normal competitive

tool within the [epinephrine auto-injector] industry.’”

Pet.App.221a (quoting Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1062 (8th Cir. 2000)). In

fact, Sanofi itself had struck exclusive rebate agreements with ESI and CVS and made exclusive rebate

offers to OptumRx and MedImpact. Pet.App.220a221a. The district court specifically noted that such

contracts “benefitted consumers” by providing “greater

discounts

on

pharmaceutical

products.”

Pet.App.220a n.22. As the court observed, “consumers gain the most when firms slash costs to the bone

and pare price down to cost.” Pet.App.222a (citation

omitted).

Regarding intent, citing the abundant evidence

that Mylan’s rebate agreements did not foreclose a

substantial share of the market, the court saw no

need “to inquire into Mylan’s precise motives for the

exclusive contracts.” Pet.App.223a (cleaned up).

Finally, the court conducted quantitative analysis

to examine the “ultimate issue” of “whether Mylan’s

rebate contracts substantially foreclosed competition.

The court observed that “the highest foreclosure percentage calculated by Sanofi’s expert was 31%”

(Pet.App.225a)—well below the typical minimum

threshold of 40%—and that, regardless, Sanofi “had

access to 80% of the commercial market within two

years” of Auvi-Q’s launch (Pet.App.229a).

12

Taken together, the court concluded that “Sanofi

has failed to present a triable issue that Mylan’s rebate contracts foreclosed Sanofi from a substantial

share of the market.” Pet.App.230a.

Second, the district court held that no reasonable

jury could find on this record that Mylan leveraged

its non-contestable demand for EpiPen to protect its

contestable demand from competition. The court first

explained that Sanofi’s authorities involved “multiproduct bundles,” and thus did not speak to singleproduct rebates. Pet.App.232a-234a (discussing Eisai,

821 F.3d at 401; In re Remicade Antitrust Litig., 345

F. Supp. 3d 566, 578-580 (E.D. Pa. 2018)). But even

if Sanofi’s legal theory were sound, the court held,

“[the] facts here present no triable issue whether ‘an

equally efficient competitor was unable to compete

with Mylan’” because “the actual data for plans

where EpiPen was excluded reveals EpiPen lost significant market share when it was excluded in favor

of Auvi-Q.” Pet.App.234a-236a. In other words,

when Sanofi belatedly decided to compete on price, it

could—and frequently did—displace Mylan, including

on formularies managed by CVS and ESI.

Third, the court concluded that Sanofi had presented insufficient evidence of other exclusionary conduct amounting to “an overall scheme to restrict competition in the [epinephrine auto-injector] market.”

Pet.App.237a. Sanofi pointed to two acts: (1) allegedly

deceptive speech involving a pharmaceutical study

and marketing materials, and (2) the “EpiPen4Schools” program, under which Mylan provided free

or heavily discounted epinephrine auto-injectors to

qualifying schools.

13

As to the allegedly deceptive conduct, the court

noted that deceptive acts “can give rise to antitrust liability” if they are “‘so widespread and longstanding

and practically incapable of refutation that they are

capable of injuring both consumers and competitors.’”

Pet.App.238a (quoting Novell, Inc. v. Microsoft Corp.,

731 F.3d 1064, 1079-1080 (10th Cir. 2013) (Gorsuch,

J.)). The court found no triable issue involving the allegedly deceptive speech here, which (1) was not

clearly false, (2) was short-lived, and (3) was readily

neutralized or offset by rivals. Pet.App.238a-245a.

Likewise, the court found no triable issue concerning

Mylan’s schools program, as “nothing in the antitrust

laws” prohibits “supplying free EpiPens to schools”

and Sanofi could have neutralized Mylan’s program

by offering its own. Pet.App.245a-247a.

After concluding that each of Sanofi’s claims of anticompetitive conduct, standing alone, was “utterly

lacking” in “numerous critical respects,” the court

held that the challenged acts “collectively cannot

have any synergistic” anticompetitive effect.

Pet.App.248a (citation omitted).

The court thus

granted summary judgment to Mylan on whether its

challenged conduct was anticompetitive.

The district court also granted summary judgment

to Mylan on whether Sanofi could establish antitrust

injury. After reviewing the extensive record, which is

littered with contracts that Sanofi competed for and

won, the court held “that no reasonable jury could

find that Mylan’s conduct produced an antitrust injury,” as “Sanofi had the opportunity to compete for

better placement on payors’ formularies by offering

bigger discounts in exchange for exclusivity for AuviQ.” Pet.App.255a. Indeed, when Sanofi “offered more

competitive pricing than Mylan,” it succeeded, bene-

14

fitting consumers. Ibid. Thus, “[t]he summary judgment record presents no triable issue of antitrust injury.” Ibid.

F. The court of appeals’ decision

Sanofi appealed, challenging the district court’s

holdings that (1) there was no “triable issue of exclusionary conduct” (Pet.App.3a), and (2) “no reasonable

jury could find that Mylan’s conduct produced an antitrust

injury”

(Pet.App.94a

n.29

(quoting

Pet.App.254a)). In a well-reasoned 89-page opinion,

the Tenth Circuit unanimously affirmed.

The court of appeals ruled de novo based on the

absence of any genuine dispute over the presence of

exclusionary conduct. Pet.App.61a. Applying the

foreclosure standards of Tampa Electric and a “full

rule of reason analysis” (Pet.App.45a n.7), the court

treated “the consumer welfare standard” as its “guiding principle” in analyzing Mylan’s conduct, bearing

“‘the interests of consumers, not competitors, in

mind.’” Pet.App.46a-47a (citing Reiter v. Sonotone

Corp., 442 U.S. 330, 343 (1979), and quoting Novell,

731 F.3d at 1072). Because Sanofi did not offer “any

evidence of actual or threatened consumer harm,” the

court stated, it failed to “present a triable issue of monopolization.” Pet.App.2a.

Specifically, Sanofi challenged “‘price-cutting activities,’” which antitrust law generally protects.

Pet.App.52a (quoting Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 594 (1986)). Sanofi

did so even though it did not “dispute that it cannot

pass the price-cost test,” as it could not prove that

“(1) the rival’s low prices ‘are below an appropriate

measure of its rival’s costs,’ and (2 the rival had a

‘dangerous probability[] of recouping its investment

15

in below-cost prices.’” Pet.App.44a-45a n.7. Indeed,

Sanofi’s expert witness opined that Mylan consistently priced above cost. Pet.App.19a. Sanofi thus needed to present a triable dispute over whether “the anticompetitive effects (if any) of the exclusion [of Sanofi]

outweigh any benefits to competition from it,” and

particularly the “corresponding procompetitive benefit [of] lower prices.” Pet.App.51a. Yet Sanofi failed

to do so.

In so holding, the court of appeals was careful to

“distinguish between restraints with anticompetitive

effect that are harmful to the consumer and restraints stimulating competition that are in the consumer’s

best interest.” Pet.App.47a-48a (cleaned up) (quoting

Leegin Creative Leather Prods., Inc. v. PSKS, Inc.,

551 U.S. 877, 886 (2007), and citing Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018), and Novell,

731 F.3d at 1072). With that distinction in mind, the

court cited extensive undisputed evidence that Mylan’s rebate agreements sparked “legitimate competition for the formulary” (Pet.App.94a), thus reducing

the price that consumers paid. As the court elaborated, “Mylan’s exclusive rebate agreements brought about lower prices for epinephrine auto-injectors than

if Mylan and Sanofi used preferred or co-preferred rebate agreements.” Pet.App.53a.

The court of appeals also analyzed Sanofi’s other

theories. Like the district court, it found no evidence

of foreclosure given Sanofi’s extensive use of similar

rebates and its success displacing Mylan’s EpiPen at

PBMs such as CVS and ESI. Pet.App.53a-80a. The

court explained that, of the seven principal PBMs,

Sanofi was never restricted on three of them; and

within just one year, two of the remaining four removed any restrictions (Pet.App.57a)—such that the

16

31% foreclosure rate in the first year dropped to 20%

one year later (Pet.App.58a (“By April 2015, Auvi-Q

regained 80% access.”)).

The court also rejected Sanofi’s theory of entrenched and non-contestable demand, noting that

Sanofi failed to invoke the “appropriate legal standard” for assessing it. Pet.App.81a-89a. Indeed, Sanofi failed to provide any briefing “regarding what substantive law ought to apply to Sanofi’s claim that Mylan anticompetitively leveraged its entrenched demand,” and it “explicitly disavowed” reliance on the

one theory it implicitly invoked—a theory of per se

unlawfulness based on LePage’s Inc. v. 3M, 324 F.3d

141, 155 (3d Cir. 2003) (en banc). Pet.App.89a (citing

Oral Arg. 7:31). Finally, the court rejected as insufficient Sanofi’s theories concerning deceptive speech

(Pet.App.90a), Mylan’s schools program (Pet.App.90a92a), and related conduct (Pet.App.92a-93a). Whether “[c]onsidered separately or together,” the court

concluded, “Sanofi’s arguments do not raise a triable

issue of exclusionary conduct.” Pet.App.94a.

Having found no antitrust violation, the court did

not reach the district court’s independent holding

that Sanofi could not establish antitrust injury.

Pet.App.94a n.29.

17

REASONS FOR DENYING THE PETITION

I. Sanofi’s petition for certiorari rests on a host

of false factual premises, to the point that its

“question presented” is not even presented.

The question supposedly presented is whether “a

monopolist’s exclusionary conduct” violates § 2 of the

Sherman Act if it “would foreclose equally (or potentially equally) efficient rivals from accessing significant channels of distribution.” Pet. i. But the Tenth

Circuit did not dispute that principle of law. Rather,

applying settled antitrust precedent, it affirmed the

district court’s fact-specific conclusion that the record

here contains no evidence that Sanofi was an equally

efficient rival (even “potentially” so), that it was foreclosed from significant channels of distribution, or

that Mylan forced Sanofi from the market.

As both courts below held, it is undisputed that

Sanofi had a higher cost structure (Pet.App.16a) and

that, once Sanofi began competing on price, it quickly

obtained access to 80% of the market (Pet.App. 30a34a; Pet.App.229a, 235a-236a). In other words, “the

clear answer to Sanofi’s problem was offering better

prices” (Pet.App.17a), and both courts below were “in

full agreement” that “Sanofi ‘failed to present a

triable issue that Mylan’s rebate contracts foreclosed

Sanofi from competing” (Pet.App.53a-54a (quoting

Pet.App.229a-230a)). What drove Sanofi from the

market was not Mylan’s pricing but an FDA Class I

recall.

As below, therefore, Sanofi relies on “incomplete

and cherry-picked” facts, “mischaracterization[s] or

misunderstanding[s],” and “serious evidentiary deficienc[ies].” Pet.App.58a. Once that becomes clear, it

18

turns out that Sanofi’s “question presented” is not

even presented.

A. The undisputed record shows that Sanofi

could compete for business even though it

was not an equally efficient rival.

Most fundamentally, the Question Presented (like

the putative circuit split) rests on the premise that

Sanofi and Mylan were “equally efficient.” Pet. i, 2.

In one sense this is unsurprising, as Sanofi’s own

leading authority explains that § 2 is concerned only

with “‘attempt[s] to exclude rivals on some basis other than efficiency.’” Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 605 (1985).2 But as

the courts below recognized, Sanofi was not as efficient as Mylan—it labored under a higher cost structure. Pet.App.16a, 127a.

Both courts below held that undisputed evidence,

including Sanofi’s internal documents, revealed that

Sanofi’s “high production costs and royalty rates” put

it in “‘a bind’”: Sanofi had concluded that it “‘may already be as aggressive as’ it c[ould] be” in discounting, yet “PBMs rejected [its] offers as ‘inadequate,’

‘not competitive,’ and even ‘laughable.’” Pet.App.16a;

accord Pet.App.127a. Specifically, “Auvi-Q’s ‘royalty

rate was 20 percent and it had a higher [cost-ofgoods-sold] profile than other pharmaceutical products.’” Pet.App.16a (alteration in original); accord

Pet.App.127a (Mylan’s above-cost pricing “put pressure on” Sanofi’s bottom line, given its “20 percent”

2 Sanofi’s heavy reliance on Aspen Skiing is telling.

As the

Court has explained, its holding lies “at or near the outer

boundary” of Section 2. Verizon Commc’ns v. Law Offices

of Curtis V. Trinko, 540 U.S. 398, 409 (2004).

19

royalty and “higher COGS profile”) (citing Barry Dep.

31-32)). Put another way, Sanofi was less efficient

than Mylan.

Sanofi’s cost disadvantage was in fact the reason

it initially chose “to market Auvi-Q as a premium alternative to EpiPen.” Pet.App.14a; see Pet.App.57a

(citing Pet.App.120a-123a (collecting evidence)), 122a.

But Sanofi’s “refus[al] to seek out exclusivity or deeply discount its ‘better mousetrap’ * * * turned out to

be a mistake,” as Sanofi “miscalculated how much

PBMs would value Auvi-Q’s unique attributes.”

Pet.App.57a, 17a. “Several PBMs believed” the companies’ products were “similar” or “interchangeable.”

Pet.App.17a.

Faced with undisputed evidence that it had higher

costs than Mylan, Sanofi strives to show that it was

equally efficient by quoting—some 18 times—one customer’s offhand remark that Sanofi could not win its

business even with price cuts of “100%” or more. Pet.

4; see also Pet. 22 (“since even 100% discount was not

sufficient for Sanofi to access the market through the

largest PBM (ESI), Sanofi obviously could not ‘capture the business’ merely by beating Mylan’s prices”);

Pet. 6-8, 11, 13, 15-16, 20, 24, 26; accord AAN Br. 13.

Warming to its theme, Sanofi assures the Court:

“And it was not just talk.” Pet. 7.

The problem, as both courts below observed, is the

record. Sanofi won business from this customer—

ESI, the largest PBM—by offering discounts of well

under 100%. Pet.App.30a-31a, 57a-58a, 151a-152a,

212a. By offering both price protection and rebates

on Auvi-Q and another drug, Sanofi “reverse[d] its

exclusion from ESI’s national formulary” and “resecure[d] [its] business.” Pet.App.30a, 31a (internal

20

quotations omitted). In other words, Sanofi’s oftrepeated quotation of ESI is “just talk.” Pet. 7.

On this record, the Tenth Circuit had no occasion

to reject the “equally efficient competitor principle”

that Sanofi repeatedly invokes. E.g., Pet. 4. Both

courts below simply took stock of the “uncontroverted” proof that Sanofi was less efficient yet managed

to win business from Mylan by cutting prices.

Pet.App.3a, 59a-60a. Even “accept[ing] Sanofi’s noncontestable demand theory,” “[the] facts here present

no triable issue whether ‘an equally efficient competitor was unable to compete with’ Mylan.”

Pet.App.234a. For that reason alone, this case offers

no opportunity—much less a good one—to take up

the “question presented.”

B. The undisputed record shows that Sanofi

was not foreclosed from the epinephrine

auto-injector market.

But there is more. Sanofi’s assertion that it was

barred from a substantial share of the epinephrine

auto-injector market—that demand “would not move

to a new rival in the short term” (Pet. 5)—is equally

foreclosed by the undisputed evidence.

As Sanofi concedes (Pet. 25), “an exclusive-dealing

arrangement * * * does not violate [the Sherman Act]

unless” it is “probable that performance of the contract will foreclose competition in a substantial share

of the line of commerce affected.” Tampa Elec., 365

U.S. at 327; accord XVIII Philip A. Areeda & Herbert

H. Hovenkamp, Antitrust Law ¶ 1802b (5th ed.

2022).3 Applying Tampa Electric, Third Circuit precThis analysis proceeds under the rule of reason.

Pet.App.44a-45a & n.7 (citing cases); see also Barry

3

21

edents that Sanofi invokes (including ZF Meritor),

and other exclusive-dealing cases (see id. ¶¶ 1821c1821d), both courts below carefully analyzed whether

Sanofi’s evidence created a genuine factual dispute as

to market foreclosure. Both courts held that Sanofi’s

case failed—quantitatively and qualitatively—under

a “rule of reason” analysis. Pet.App.50a, 44a-46a &

n.7; Pet.App.229a-230a.

As both decisions below recognized, the facts belie

any suggestion that Sanofi was kept from “build[ing]

up sufficient market share to compete.” Pet. 25. And

even if the courts below had erred, they applied the

proper standard—meaning Sanofi would at most be

seeking factbound error correction that would not

warrant certiorari. See Rule 10 (“certiorari is rarely

granted when the asserted error consists of erroneous

factual findings or the misapplication of a properly

stated rule of law”).

Quantitative foreclosure. As discussed (at 6-7),

when Auvi-Q launched, Sanofi “refused to * * * deeply

discount its ‘better mousetrap,’” thinking it could differentiate its product as “unique.” Pet.App.57a, 17a.

Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 236 (1st

Cir. 1983) (Breyer, J.); United States v. Visa U.S.A., Inc.,

344 F.3d 229, 237-238 (2d Cir. 2003); Satellite Television

& Associated Res., Inc. v. Cont’l Cablevision of Va., Inc.,

714 F.2d 351, 354 (4th Cir. 1983); Hornsby Oil Co. v.

Champion Spark Plug Co., 714 F.2d 1384, 1392 & n.6 (5th

Cir. 1983); NicSand, Inc. v. 3M Co., 457 F.3d 534, 544 n.6

(6th Cir. 2006), reh’g en banc granted, opinion vacated

(Nov. 22, 2006); Roland, 749 F.2d at 393; Minn. Ass’n of

Nurse Anesthetists v. Unity Hosp., 208 F.3d 655, 660 (8th

Cir. 2000); Aerotec Int’l, Inc. v. Honeywell Int’l, Inc., 836

F.3d 1171, 1180 n.2 (9th Cir. 2016).

22

Sanofi believed “offering aggressive rebates” would

“‘set off a whole cascade of price discounts’”—that

“‘there are no winners in a price war’” and that, as

Sanofi’s former CEO testified, “pricing moves are

very difficult to reverse.” Pet.App.17a-18a. That

strategy failed.

After that, however, Sanofi started competing on

price—and immediately gained market share. Beyond obtaining placement on all of ESI’s formularies

—which together amounted to 38% of the market

(Pet.App.8a)—Sanofi “reversed exclusivity at * * *

Aetna” and “successfully excluded EpiPen” from two

CVS formularies. Pet.App.57a-58a. Moreover, other

PBMs—such as “Prime, and Cigna[]”—“never restricted or excluded Auvi-Q” in the first place.

Pet.App.20a. Of the two remaining formularies,

MedImpact stayed with EpiPen only after finding

that its cost after discounts was $113 versus $145 for

Auvi-Q. Pet.App.59a. Indeed, Sanofi has never identified any instance when Auvi-Q was excluded or restricted when Sanofi offered a better price.

Even “[a]t the height of its allegedly anticompetitive behavior, Mylan only foreclosed Auvi-Q from 31%

of the U.S. population” (Pet.App.54a)—well below the

minimum threshold of “roughly 40% or 50%” that

courts typically require for exclusive dealing claims.

Pet.App.54a; see Areeda & Hovenkamp ¶ 1821c (foreclosure of less than 40% is “presumptively harmless

to competition”); see also McWane, Inc. v. F.T.C., 783

F.3d 814, 837 (11th Cir. 2015) (“Traditionally a foreclosure percentage of at least 40% has been a threshold for liability in exclusive dealing cases.”). One

year later, due to Sanofi’s decision to “offer[] more

competitive pricing” (Pet.App.255a), Auvi-Q had

displaced Mylan from several formularies and

23

“regained ‘80% commercial market’ coverage”—i.e.,

the foreclosure share had dropped to 20%.

Pet.App.34a; accord Pet.App.229a (Sanofi “had access

to 80% of the commercial market within two years” of

entering it); Pet.App.30a-34a; see Pet.App.235a-236a

(“the actual data for plans where EpiPen was

excluded reveals EpiPen lost significant market share

when it was excluded in favor of Auvi-Q”).

Aware that 31% foreclosure (at most) is insufficient, Sanofi says the 31% was “amplified” by “spillover effect” to “more than half the market.” Pet. 25.

But as the court below recognized, Sanofi’s spillover

theory was not even supported by its own expert, who

declined “to endorse any market foreclosure greater

than 31%.” Pet.App.67a. Without acknowledging the

Tenth Circuit’s reasons for “refus[ing] to recognize”

Sanofi’s unprecedented use of “spillover foreclosure”

—including its incompatibility with Tampa Electric

and many factual deficiencies (Pet.App.64a-67a)—

Sanofi chastises the court for “[s]ubstituting its own

view of economic theory” for Sanofi’s expert’s. Pet.

14; 25. But since Sanofi’s expert never applied Sanofi’s spillover theory to her foreclosure analysis, “Sanofi’s ‘more than half the market’ claim lacks any factual support.” Pet.App.67a.

Qualitative Foreclosure. Under black-letter antitrust law, “low foreclosure percentages are typically

decisive for the defendant.” Areeda & Hovenkamp

¶ 1821d. But even if Sanofi could clear that threshold

requirement, the undisputed evidence would preclude

Sanofi from showing qualitative foreclosure. See also

ibid. (even “higher percentages are seldom decisive in

and of themselves”; they simply call for further analysis under the rule of reason). If, unlike here, a restraint forecloses enough of the market, courts ana-

24

lyze its “‘probable effect” on “the relevant area of effective competition’ and ‘the probable immediate and

future effects which pre-emption of that share of the

market might have on effective competition therein.’”

Pet.App.46a (quoting Tampa Elec., 365 U.S. at 329).

Under Tampa Electric, that entails considering a contract’s duration and ease of terminability, evidence of

coercion, actual market success, competitors’ use of

exclusive dealing, and other evidence of the contracts’

probable effect. Here, those factors underscore that

the petition rests on a false factual premise.

First, it is “undisputed” that Mylan’s agreements

were short, easy to terminate, and actually were terminated—often—by PBMs, which drove the renegotiation process. Pet.App.56a. Most of the contracts

“imposed terms of two and a half years or less” and

“allow[ed] either party to terminate the agreements

without cause on 90-days’ written notice or less.”

Pet.App.56a (citing Pet.App.204a-205a). Exercising

their contractual rights, “PBMs invoked these termination provisions and renegotiated rebate agreements annually” or “even more frequently.” Ibid.

Sanofi could “simply wait for the contracts to expire

or make alluring offers to initiate termination,” making the agreements “of little antitrust concern.”

Pet.App.55a (collecting cases). And Sanofi successfully did so, obtaining exclusive agreements of its own

with CVS and ESI. Pet.App.57a-58a.

Second, “exclusive rebate agreements were a normal competitive tool in the epinephrine auto-injector

market,” and undisputed evidence “show[ed] that

PBMs often instigated exclusivity to stimulate price

competition, with Sanofi bidding for and entering into

exclusive

rebate

agreements

for

Auvi-Q.”

Pet.App.56a. Thus, “[t]he widespread use of exclu-

25

sive rebate agreements in the epinephrine autoinjector market”—including by Sanofi—merely

“demonstrates the market was functioning properly.”

Pet.App.56a (citing Paddock Publications, Inc. v. Chicago Trib. Co., 103 F.3d 42, 45 (7th Cir. 1996) (“Competition-for-the-contract is a form of competition that

[the] antitrust laws protect rather than proscribe.”);

Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614

F.3d 57, 78-79, 83 (3d Cir. 2010); NicSand, 507 F.3d

at 453-454 (en banc) (Sutton, J.)).

Sanofi has

acknowledged that this is “how the entire branded

pharmaceutical

industry

functions.”

10C.A.App.2037. As Sanofi’s expert told Congress: “The

way you get low prices in the pharmaceutical industry is by the ability to exclude drugs.” Pet.App.57a

(quoting Hearings, supra, at 13 (statement of Dr.

Scott Morton)).4

Third, as discussed, Sanofi could compete successfully by offering a “‘a better deal.’” Pet.App.57a (quoting Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d

380, 394 (7th Cir. 1984)). And it did so—with “resounding success” that enabled it to obtain “80% access to the commercial market” by April 2015, less

than two years after its launch. Pet.App.57a-58a. As

the court below put it: “The record supports only one

conclusion: when Sanofi beat Mylan’s prices it succeeded.” Pet.App.59a.

Amicus AAN’s criticisms of drug pricing practices (Br.

11-12), while unfounded (see Pet.App.70a), apply as fully

to Sanofi’s rebates as to Mylan’s. Likewise, AAN’s claim

that the Tenth Circuit “focused on the wrong market” (Br.

1) is both incorrect and not presented by Sanofi’s petition.

AAN’s brief thus provides no support for granting review.

4

26

Fourth, Mylan did not coerce PBMs into signing

any contracts. Pet.App.72a-73a, 210a-219a. Sanofi

“fail[ed] to marshal any evidence to support” its “novel theory of coercion.” Pet.App.74a, 78a-79a. Rather,

“PBMs entered exclusive deals with both Mylan and

Sanofi whenever they offered the most advantageous

terms,” and “exclusivity was not forced upon PBMs,”

but rather “was wielded by PBMs to push for more

competitive pricing.” Pet.App.75a (emphasis added)

(citing Pet.App.132a-154a), 79a (citing Pet.App.129a130a). “Unlike [United States v. Dentsply Int’l, Inc.,

399 F.3d 181 (3d Cir. 2005)], ZF Meritor, or McWane,

no PBM[s] testified that they felt compelled to enter

into exclusive agreements with Mylan despite unfavorable terms.” Pet.App.74a-75a. Moreover, “several

PBMs testified that they could have excluded EpiPen

in favor of Auvi-Q because they could shift product

use from EpiPen to Auvi-Q.” Pet.App.34a. The court

below thus “join[ed] the district court in concluding

there is no evidence in the record from which to infer

coercion.” Pet.App.79a.

In sum, “the clear answer to Sanofi’s problem was

offering better prices.” Pet.App.17a. Both courts

below were “in full agreement” that “Sanofi ‘failed to

present a triable issue that Mylan’s rebate contracts

foreclosed Sanofi’ from competing” for “a substantial

share of the market.”

Pet.App.53-54a (quoting

Pet.App.230a). And without a factual predicate,

there is no legal issue for this Court to resolve.

C. The undisputed record shows that an

FDA recall, not Mylan, caused Sanofi’s

exit from the market.

Finally, there is no evidence that Sanofi was “intentionally excluded” from the epinephrine auto-

27

injector market by Mylan, or that Mylan “smother[ed]” it in “infancy.” Pet. 25. The petition implies

that Sanofi’s market share continued to decline until

it had no choice but to pull out of the market. In reality, Sanofi steadily gained market share from the

moment it cut prices, “increas[ing] its investment in

the brand” (Pet.App.34a) and winning accounts with

ESI and CVS (Pet.App.57a-58a)—steadily that is, until October 2015, when Sanofi withdrew Auvi-Q from

the market pursuant to an “FDA Class I recall.”

Pet.App.13a.

Remarkably, Sanofi never mentions the undisputed reason its product failed, stating only: “Auvi-Q was

taken off the market.” Pet. 9. But its “Class I recall”

involved “a reasonable probability” that using Auvi-Q

“w[ould] cause serious adverse health consequences

or death.” Pet.App.178a (quoting U.S. Food & Drug

Admin., Recalls Background and Definitions (July 31,

2014)).5 The recall came about after the FDA’s “unannounced inspection” of a Sanofi facility

(Pet.App.177a), “following reports that Auvi-Q was

failing to inject epinephrine” (Pet.App.13a). Mylan

had nothing to do with this.

***

Like its advocacy below, Sanofi’s petition rests on

“mischaracterization[s]” and “incomplete and cherrypicked” characterizations of the record. Pet.App.58a.

Once these “serious evidentiary deficienc[ies]” (ibid.)

are exposed, it is plain that Sanofi’s petition rests on

a raft of false premises—that Sanofi was an “equally

* * * efficient rival[],” that it was unfairly kept “from

https://www.fda.gov/safety/industryguidancerecalls/recalls-background-and-definitions.

5

28

accessing significant channels of distribution,” and

that it was Mylan that forced Sanofi out of the market. Pet. i. Certiorari should be denied.

II. Sanofi’s alleged circuit split is not presented

on these facts and in all events is overstated.

Many of the same mischaracterizations of the record that preclude this Court from resolving the “question presented” also show why Sanofi’s alleged circuit

split, to the extent that it even exists, is not implicated by the court of appeals’ factbound decision. Moreover, the ruling below closely tracks the decisions of

other circuits and this Court, and Sanofi’s allegedly

conflicting cases involved dissimilar markets and discounting arrangements.

A. Sanofi kicks off its case for a circuit split with

the tired theme that “Mylan’s conduct would exclude

equally or more efficient rivals—including ESI telling

Sanofi that a 100% discount would not be sufficient to

access the market.” Pet. 16. According to Sanofi, this

evidence “would have been treated as material in

other circuits,” as “all of them—except the Tenth Circuit—at least attempt to adhere to the equally efficient competitor principle.” Pet. 16, 17; accord Pet. 2.

Nothing in the opinion below, however, remotely

suggests that—were the facts as portrayed by Sanofi

—the court would have “deemed that evidence immaterial.” Pet. 17. The court simply ruled based on the

actual evidence, which “doesn’t present a triable issue

whether EpiPen’s non-contestable demand prevented

Auvi-Q from competing as an equally efficient competitor.” Pet.App.237a; see supra at 18-26. Here, as

in Sanofi’s own cases, “nothing in the record indicates

that an equally efficient competitor was unable to

compete with [Mylan].” Eisai, 821 F.3d at 406. It is

29

Sanofi, not the court below, that “refuse[s] to consider

directly relevant evidence.” Pet. 15.

In a variation on its theme, Sanofi says the ruling

below further conflicts with Eighth and Ninth Circuit

decisions that apply a price-cost “safe harbor” for exclusive dealing contracts that offer “above-cost discounting” (Cascade Health Sols. v. PeaceHealth, 515

F.3d 883, 904 (9th Cir. 2008))—and thus do not apply

“a full rule-of-reason analysis.” Pet. 20 (also discussing Concord, 207 F.3d at 1061).

But even assuming, arguendo, that the price-cost

test would produce different results in some cases, it

would not do so here. It is undisputed that Sanofi

“had a higher [cost] profile” (Pet.App.16a), and Sanofi

adduced no evidence whatsoever that Mylan priced

its product below cost (Pet.App.193a-194a)—in fact,

Sanofi’s expert opined that Mylan priced above cost

(Pet.App.19a). That likely explains why “Sanofi d[id]

not dispute [below] that it cannot pass the price-cost

test,” which requires proof that “(1) the rival’s low

prices ‘are below an appropriate measure of its rival’s

costs,’ and (2) the rival had a ‘dangerous probability[]

of recouping its investment in below-cost prices.’”

Pet.App.44a-45a n.7.

Moreover, Sanofi concedes that the price-cost test

“derives from the equally efficient competitor principle,” seeks “to discern whether a monopolist’s conduct

could exclude equally efficient rivals,” and recognizes

that discounts “attributable to the monopolist’s ‘lower

cost structure * * * represent[] competition on the

merits’”—all points that further undercut Sanofi’s

ability to satisfy the price-cost test. Pet. 4, 20 (quoting Concord Boat, 207 F.3d at 1061 (in turn quoting

Brooke Grp. Ltd. v. Brown & Williamson Tobacco

30

Corp., 509 U.S. 209, 223 (1993))). Thus, a ruling from

this Court adopting that test would only prolong the

inevitable outcome of this litigation—a conclusion

that “Sanofi’s arguments do not raise a triable issue

of exclusionary conduct.” Pet.App.94a.

The record also forecloses Sanofi’s claim of a conflict with Eleventh Circuit authority, which according

to Sanofi has “found a monopolist’s exclusionary contracts to be anticompetitive where they made it ‘infeasible for distributors to switch’ to new entrants.”

Pet. 3 (quoting McWane, 783 F.3d at 834). Setting

aside that the Eleventh Circuit requires “a foreclosure percentage of at least 40%” as “a threshold for

liability in exclusive dealing cases” (id. at 837), it is

undisputed that many PBMs here switched to Sanofi

once it began competing on price. Supra at 22-23.

B. More generally, the court of appeals carefully

limited itself to a “fact-specific” ruling (Pet.App.46a,

4a (quoting Am. Express, 138 S. Ct. at 2284), and its

reasoning accorded with that of other circuits. As

Sanofi explains, the Third, Sixth, Eleventh, and D.C.

Circuits apply the “‘rule of reason,’” “asking whether

the ‘probable effect’ [of the exclusive conduct] is to

substantially lessen competition in the relevant market.’” Pet. 3 (alteration in original; citations omitted);

see Pet. 15. Likewise, the court below applied the

“rule of reason,” asking “whether ‘performance of the

contract will foreclose competition in a substantial

share of the line of commerce affected.’” Pet.App.46a

(quoting Tampa Elec., 365 U.S. at 327).

The court of appeals was also aligned with other

circuits in requiring a showing that Sanofi was equal-

31

ly efficient (Pet.App.48a),6 and in holding that § 2 exclusive dealing claims generally require the plaintiff

to show “40% or 50%” market foreclosure—not just

31%. Pet.App.54a; see McWane, 783 F.3d at 837 (“at

least 40%”); Areeda & Hovenkamp ¶ 1821c (under

40% foreclosure is “presumptively harmless”). Moreover, the court’s qualitative foreclosure analysis

tracked that of the other circuits, which consider the

challenged contracts’ “duration” and “ease of terminability,” “percentage of the market foreclosed by the

contracts,” evidence of “coercion,” actual success on

the market, the use of exclusive dealing by competitors, and other probative evidence of the probable effect of the agreements. Compare Pet.App.50a, 55a58a, with, e.g., Eisai, 821 F.3d at 406-407; Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP,

592 F.3d 991, 996-998 (9th Cir. 2010); Race Tires, 614

F.3d at 78-79, 83; Roland, 749 F.2d at 394-395;

Areeda & Hovenkamp ¶¶ 1821d2, 1821d3.

Far from suggesting a circuit split, much less one

requiring this Court’s intervention, the court below

analyzed numerous decisions from other circuits (and

this Court), carefully considering (and in a few cases

See Barry Wright, 724 F.2d at 232; Eisai, 821 F.3d at

406; Int’l Air Indus., Inc. v. Am. Excelsior Co., 517 F.2d

714, 723 (5th Cir. 1975); Conwood Co., L.P. v. U.S. Tobacco Co., 290 F.3d 768, 782 (6th Cir. 2002); MCI Commc’ns

Corp. v. Am. Tel. & Tel. Co., 708 F.2d 1081, 1113 (7th Cir.

1983); Morgan v. Ponder, 892 F.2d 1355, 1363 (8th Cir.

1989); Cascade, 515 F.3d at 907; Marrese v. Am. Acad. Of

Orthopaedic Surgeons, 706 F.2d 1488, 1497 (7th Cir.

1983); see also Richard A. Posner, Antitrust Law 194-195

(Chicago 2d ed. 2001) (exclusionary conduct is “likely in

the circumstances to exclude from the defendant’s market

an equally or more efficient competitor”).

6

32

distinguishing) Sanofi’s authorities.7 Nowhere did

the Tenth Circuit suggest that another circuit had

erred, or that it needed to break from settled law governing exclusive dealing cases. And the court certainly did not create a circuit split in issuing a “factspecific” decision. Pet.App.46a.

C. Finally, the cases that Sanofi cites as evidence

of a circuit split involve wholly dissimilar facts. Pet.

2-4, 17-18. For example, most involved either bundled or market-share discounts,8 neither of which is

7

See Pet.App.43a-46a, 53a-54a & n.9, 74a (ZF Meritor,

696 F.3d 254); Pet.App.43a, 71a, 73a-74a, 76a (United

States v. Dentsply Int’l, Inc., 399 F.3d 181 (3d Cir. 2005)).

Pet.App.43a, 45a, 74a-75a, 80a (McWane, 783 F.3d 814);

Pet.App.39a-40a, 49a-51a, 54a, 80a (United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (en banc) (per

curiam)); Pet.App.86a (Cascade, 515 F.3d 883); Pet.App.

44a-45a n.7, 69a, 72a, 83a (Concord Boat, 207 F.3d 1039);

Pet.App.44a-45a & n.7, 75a-76a, 83a (Eisai, 821 F.3d 394);

Pet.App.85a (Sanofi “disclaimed the per se test” of

LePage’s, 324 F.3d at 155 (en banc)); Pet.App.89a

(LePage’s per se illegality theory “was explicitly disavowed

by Sanofi at oral argument. Oral Argument at 7:31”).

Cascade, 515 F.3d at 900 (“bundled discounting”); Eisai,

821 F.3d at 409 (“bundling””); LePage’s, 324 F.3d at 154

(defendant “bundl[ed] the rebates,” “set customer-specific

target growth rates in each product line,” and “linked” the

“size of the rebate * * * to the number of product lines in

which targets were met”); Microsoft, 253 F.3d at 88 (“bundled price, with no discount for a browserless OS”); ZF

Meritor, 696 F.3d at 288 (“long-term agreements offering

market-share or volume discounts.”);; Concord Boat, 207

F.3d at 1044 (“volume discount of up to 5% based on the

quantity of engines purchased”).

8

33

at issue here, or distinct markets lacking the unique

features of pharmaceutical markets.9

III. Sanofi’s other attempts to demonstrate the

importance of this case are unconvincing.

Beyond asserting a circuit split that, if it exists at

all, is not implicated on these facts, Sanofi offers no

serious argument that the ruling below warrants certiorari. In fact, most of Sanofi’s importance argument

(Pet. 21-23) simply repeats its position that “courts

cannot agree” on how to apply Tampa Electric—that

the court below “disregarded the equally efficient

competitor standard” and “price-cost test” applied by

other circuits. Pet. 21-22. We stand by our answers.

See supra at 28-33.

Sanofi says certiorari is warranted on account of

the “frequency” with which the issue here arises. Pet.

21. But one searches the petition in vain for supporting statistics or analysis.

Quoting a snippet from the decision below, Sanofi

declares that review is warranted because the Tenth

Circuit held that it “must evaluate Mylan’s exclusionary conduct separately.”

Pet. 10 (quoting

Pet.App.42a). But that statement looks quite different together with the very next sentence: “Only then

can we evaluate the evidence in totality to see if any

‘synergistic effect’ saves Sanofi’s case.” Pet.App.42a

LePage’s, 324 F.3d at 145 (“transparent tape market”);

ZF Meritor, 696 F.3d at 263 (“heavy-duty ‘Class 8’ truck

transmissions”); McWane, 783 F.3d at 819 (“ductile iron

pipe fittings”); Microsoft, 253 F.3d at 47 (“operating system[s]”); Conwood, 290 F.3d at 774 (“moist snuff market”);

Cascade, 515 F.3d at 900-901; Concord Boat, 207 F.3d at

1044 (“inboard and stern drive marine engines”).

9

34

(citations omitted). What’s more, the court later stated: “Considered separately or together, Sanofi’s arguments do not raise a triable issue of exclusionary

conduct.” Pet.App.94a; accord Pet.App.248a (district

court conclusion).

Sanofi also cites a withdrawn Department of Justice report stating that exclusionary contracts that

leverage “uncontestable” share “may in theory produce anticompetitive effects.” Pet. 18. But as the

balance of the report states, above-cost pricing is generally lawful, and “[i]t would be absurd to require the

firm to hold a price umbrella over less efficient entrants. * * * [P]ractices that will exclude only less efficient firms, such as [a competitor] dropping his

price nearer to (but not below) his cost, are not actionable.” U.S. Dep’t of Justice, Competition and

Monopoly: Single-Firm Conduct Under Section 2 of

the Sherman Act 43 (2008) (quoting R. Posner, Antitrust Law 194-195 (2d ed. 2001)). As it is undisputed

that Sanofi had “a higher [cost] profile” than Mylan

(Pet.App.16a)—and that Sanofi “cannot pass the

price-cost test” (Pet.App.44a-45a n.7)—the withdrawn report cuts against certiorari.

IV. Numerous other independent reasons make

this case inappropriate for certiorari.

Sanofi’s petition rests on the claim that the lower

courts are divided over how the antitrust law treats

exclusive-dealing contracts, together with the claim

that the court below “disregarded the equally efficient

competitor standard” and “price-cost test” applied by

other circuits. Pet. 21-22. As we showed in Part I,

the Tenth Circuit simply did not hold what the petition says it did. As we showed in Part II, any difference in approach to this question among the circuits

35

has no conceivable bearing on this case because, on

this factual record, Mylan’s conduct satisfies every

standard. And as we showed in Part III, Sanofi offers

no other convincing reason why this case is sufficiently important to warrant review.

In addition, there are at least three independent

reasons why this case is an inappropriate vehicle for

addressing the law of exclusive dealing.

First, Sanofi would face an alternative ground for

affirmance even if the Court were to grant review and

reverse. The district court ruled for Mylan “for this

second and independent reason: The summary judgment record presents no triable issue of antitrust injury.” Pet.App.254a-255a; see Pet.App.249a-255a.

Having found no antitrust violation, the Tenth

Circuit chose not to reach antitrust injury. But Sanofi could not surmount that hurdle if it somehow prevailed in this Court on the question it purports to

present. Specifically, Sanofi could not show on this

record that the “challenged conduct affected the prices, quantity or quality of goods or services, not just

[Sanofi’s] own welfare.” Pet.App.250a.

Rather, the record is “abundantly clear” that consumers benefitted from “price competition” sparked

by Mylan’s rebates. Pet.App.69a. As the district

court explained, it is undisputed that Mylan’s prices

“dropped sharply” when Sanofi began competing on

price, such that “no reasonable jury could conclude

that Mylan’s exclusive rebate agreements increased

EpiPen prices.” Pet.App.251a-252a. Likewise, “the

undisputed facts show[ed] that [Sanofi’s] output increased during the relevant time period,” “most significantly between 2013 and 2015.” Pet.App.253a.

“[V]igorous price competition” and expanded output

36

are precisely what antitrust law “strenuously protect[s].” Pet.App.80a.

Nor did Mylan’s conduct reduce consumer choice,

as no patient was “prevented from purchasing AuviQ” (Pet.App.254a)—at least until Sanofi pulled AuviQ from the market due to an FDA Class I recall. The

Tenth Circuit likewise found it “abundantly clear in

the record” that “PBMs used exclusivity to encourage

price competition” “to the ultimate benefit of consumers.” Pet.App.69a (citations omitted). That is the

very end that the antitrust laws aim to serve.

In sum, regardless of the outcome on the question

whether Mylan’s conduct violated § 2 of the Sherman

Act—which both courts below got right—the only effect of certiorari would be to delay the inevitable ruling for Mylan.

Second, Sanofi’s petition raises a host of unfounded factual disagreements with the courts below. It is

not worth the Court’s time and effort to comb through

a summary judgment record on which all four judges

below agreed. But if the Court did so, it would find

that Sanofi relies on “mischaracterization[s]” and “incomplete and cherry-picked” assertions that are foreclosed by the actual record. Pet.App.58a; see supra at

17-28.

Third, the record here would provide an atypical

vehicle to take up the law of exclusive dealing. As

Sanofi conceded in discussing the “use of exclusive

contracts” below, not only is drug pricing in general

unique, but “the court shouldn’t compare the

[epinephrine auto-injector] drug market with other

pharmaceutical products” because of its “unique differences.” Pet.App.220a (emphasis added). Thus, by

37

Sanofi’s own admission, the facts here would limit the

import of any ruling from the Court.

CONCLUSION

For the foregoing reasons, the petition for certiorari should be denied.

Respectfully submitted.

MICHAEL W. MCCONNELL

Wilson Sonsini

Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304

(650) 493–9300

CONSTANDINOS HIMONAS

Wilson Sonsini

Goodrich & Rosati, P.C.

15 West South Temple

Salt Lake City, UT 84101

(801) 401-8510

STEFFEN N. JOHNSON

Counsel of Record

KEITH KLOVERS

KELSEY J. CURTIS

Wilson Sonsini

Goodrich & Rosati, P.C.

1700 K Street, N.W.

Washington, DC 20006

(202) 973–8800

sjohnson@wsgr.com

Counsel for Respondents

MARCH 2023