BCBSM, Inc. v. Vyera Pharmaceuticals, LLC

Background

BCBSM, Inc., doing business as Blue Cross and Blue Shield of Minnesota, brought this class action on behalf of itself and similarly situated entities against Vyera Pharmaceuticals, LLC, Phoenixus AG, Martin Shkreli, and Kevin Mulleady. The court considered BCBSM's motion for final approval of a settlement at a June 17, 2022 fairness hearing.

The settlement class covered entities that, for consumption by their members, employees, insureds, participants, or beneficiaries and not for resale, indirectly purchased Daraprim, paid some or all of its purchase price, or provided reimbursement for those purchases from August 7, 2015, through January 28, 2022. The court had previously preliminarily approved the settlement, certified the class for settlement purposes, appointed BCBSM as class representative, appointed class counsel, approved notice procedures, and approved a plan for distributing settlement funds.

Settlement Approval

Under Rule 23(e)(2) of the Federal Rules of Civil Procedure, the court granted final approval. It found that the settlement was fair, reasonable, and adequate and served the best interests of class members. The court found that BCBSM and class counsel had adequately represented the class; that the settlement was negotiated at arm's length with the assistance of a mediator; and that the injunctive relief and up to $28 million in cash compensation were adequate in light of the costs, risks, and delay of continued litigation. It also found that the allocation plan would process claims and distribute funds effectively, that the attorneys' fees awarded were reasonable, and that the pro rata distribution treated class members equitably.

The court continued to certify the settlement class solely for purposes of the settlement. It found that the notice plan—including mailed, emailed, digital advertising, press release, and website notice—satisfied the applicable rule and due-process requirements. Five entities—Accusoft Corp., Koniag, Inc., Donegal Mutual Insurance Company, Citation Oil & Gas Corp., and Klick USA, Inc.—validly opted out. They were excluded from the class, were not bound by the judgment, and could not claim or receive settlement benefits. The opinion states that no objections were submitted.

Disposition

Judge Denise L. Cote granted the motion for final approval. The court ordered that the action and all released claims be dismissed with prejudice and released against the releasees. Class members other than the opt-outs were bound by the judgment and were permanently barred from prosecuting the released claims against the releasees. The parties were generally to bear their own costs, subject to the settlement agreement and the court's orders.

The court retained exclusive jurisdiction over the settlement and related agreements, including their administration, completion, enforcement, fee or expense requests, and disputes about the defendants' continuing settlement obligations. The clerk was directed to enter the final judgment under Rule 54(b). The judgment and settlement were not admissions or findings of liability, wrongdoing, statutory violations, or the truth of the claims or allegations.