Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
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Hospira is involved in various claims and legal proceedings, as well as product liability claims, regulatory matters and proceedings related to Hospira's business, including in some instances when Hospira operated as part of Abbott Laboratories. |
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Precedex™ Matters |
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Hospira is involved in a number of lawsuits relating to the ability of various competitors to market a generic form of Hospira's Precedex™ (dexmedetomidine hydrochloride), a proprietary sedation agent. |
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On August 18, 2014, the FDA allowed a carved-out label for generic competitors. Immediately following that decision, Mylan Institutional, LLC and Par Sterile Products, LLC launched generic versions of Precedex™ concentrate. On August 19, 2014, Hospira initiated litigation over the FDA's action, which was settled on October 28, 2014. |
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In December 2013, Hospira entered into a settlement agreement in its patent infringement litigation over Precedex™ with Sandoz, Inc. and Sandoz Canada, Inc. (collectively "Sandoz"), related to Sandoz's "Paragraph IV" notice indicating that it has filed an ANDA with the FDA for a generic version of Precedex™. On September 22, 2014, the settlement agreement was amended to allow Sandoz to launch a generic version of Precedex™ in the U.S. from that date and Sandoz subsequently launched a generic version of Precedex™ in the U.S. In February 2015, an ongoing appeal and scheduled oral argument at the U.S. Court of Appeals for the Federal Circuit, stemming from the denial of a motion to intervene by Sun Pharmaceutical Industries, Inc. ("Sun") in the Sandoz patent infringement litigation over Precedex™, was postponed while Hospira and Sun discussed settlement. |
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In November 2014, Hospira entered into a confidential settlement agreement in its patent infringement litigation over Precedex™ with Intas Pharmaceuticals Ltd. and Accord Healthcare, Inc. USA (collectively "Intas") related to Intas' "Paragraph IV" notice letter indicating that it has filed an ANDA with the FDA for a generic version of Precedex™. In December 2014, a stipulation of dismissal was filed in U.S. District Court for the Middle District of North Carolina. |
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In March 2015, Hospira entered into a confidential settlement agreement in its patent infringement litigation over Precedex™ with Aurobindo Pharma Ltd., Aurobindo Pharma USA, Inc., and Auromedics Pharma LLC (collectively "Aurobindo") related to Aurobindo's "Paragraph IV" notice letter indicating that it has filed an ANDA with the FDA for a generic version of Precedex™. |
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Hospira and Orion Corporation have ongoing actions against the following parties alleging infringement of US Patent No. 6,716,867: |
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Defendant | U.S. District Court Where Filed* |
Sun Pharmaceutical Industries, Inc. and Gland Pharma Ltd. | Eastern District of Michigan, No. 10-cv-14514 |
Akorn, Inc. | Northern District of Illinois, No. 14-cv-02811 |
Actavis US Holding LLC and Actavis LLC | District of Delaware, No. 14-cv-00488 |
Eurohealth International Sarl and West-Ward Pharmaceutical Corp.** | District of Delaware, No. 14-cv-00487 |
Eurohealth International Sarl and West-Ward Pharmaceutical Corp.** | District of Delaware, No. 14-cv-01008 |
*All filed April 18, 2014, except case No. 10-cv-14514, which was filed November 12, 2010 and case No. 14-cv-01008, which was filed August 1, 2014. |
** Eurohealth International Sarl purchased the assets of Ben Venue Laboratories, Inc. d/b/a Bedford Laboratories. West- Ward Pharmaceutical Corp. is Eurohealth’s agent in the United States. |
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These lawsuits are based on the "Paragraph IV" notice provided by the respective ANDA holders, above, indicating that each has filed an ANDA with the FDA for a generic version of Precedex™. Hospira seeks a judgment of infringement, injunctive relief and costs. |
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Stockholder Litigation |
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Hospira and members of its Board of Directors are named as defendants in five class action lawsuits filed in the Delaware Court of Chancery alleging breaches of fiduciary duty in connection with the Merger Agreement. Pfizer and Merger Sub are also named as defendants. The lawsuits, which seek to enjoin the proposed transaction, allege generally that the Merger Agreement resulted from an unfair process and fails to maximize value for Hospira stockholders. The lawsuits were filed by the following named plaintiffs, on behalf of themselves and all others similarly situated: Robert J. Casey II, Samuel Montini, Charles Zimmerman, Jason Chen, and Patricia Takach. |
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Regulatory Matters |
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Hospira's businesses are subject to regulatory inspections by regulatory authorities across the globe. Such regulatory inspections may lead to observations (commonly referred to as Form 483 observations in the U.S.), untitled letters, warning letters or similar correspondence, voluntary or involuntary product recalls, consent decrees, injunctions to halt manufacture and distribution of products, seizures of violative products, import and export bans or restrictions, monetary sanctions, delays in product approvals or clearances, civil penalties, criminal prosecution and other restrictions on operations. |
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Hospira has received warning letters from the FDA related to matters affecting its pharmaceutical manufacturing facility in Mulgrave, Victoria, Australia, pharmaceutical and device manufacturing facilities in Clayton and Rocky Mount, North Carolina, its device manufacturing facility in La Aurora de Heredia, Costa Rica, Irungattukottai, India, and its device quality systems and governance in Lake Forest, Illinois. The Company has responded fully, and in a timely manner, to these warning letters. By letter dated April 16, 2015, the FDA advised Hospira that it had completed its evaluation of the Company's corrective actions in response to the April 2010 warning letter relating to Hospira's Rocky Mount and Clayton, North Carolina, pharmaceutical manufacturing facilities. On April 1, 2015, Hospira received a warning letter from the FDA related to a May 2014 inspection of its pharmaceutical manufacturing facility located in Liscate, Italy, to which Hospira has responded. |
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The remediation plans in response to the warnings letters involve commitments by Hospira to enhance its quality system, products, facilities, employee training, quality processes and procedures, and technology. While Hospira continues implementing its remediation plans, the plans are subject to update and revision based on issues encountered by Hospira or its third-party consultants during the remediation process, or on further interaction with the FDA or other regulatory bodies. Hospira cannot, however, give any assurances as to the expected date of resolution of the matters identified in the warning letters. |
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Litigation Exposure Evaluation |
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Hospira's litigation exposure, including product liability claims, is evaluated each reporting period. Hospira's accruals, which are not significant at March 31, 2015 and December 31, 2014, are the best estimate of loss. Based upon information that is currently available, management believes that the likelihood of a material loss in excess of recognized amounts is remote. |
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Additional legal proceedings may occur that may result in a change in the estimated accruals recognized by Hospira. It is not feasible to predict the outcome of such proceedings with certainty and there can be no assurance that their ultimate disposition will not have a material adverse effect on Hospira's financial position, cash flows, or results of operations. |