The primary objectives of Part 1 are to (1) evaluate three dose levels of liposome bupivacaine versus placebo with respect to the magnitude and duration of the analgesic effect achieved following single dose injection femoral nerve block with liposome bupivacaine, and (2) select a single therapeutic dose of liposome bupivacaine from the three dose levels to be tested in Part 2.

Part 2: The primary objective of Part 2 is to compare the magnitude and duration of the analgesic effect of single injection femoral nerve block of a single dose level of liposome bupivacaine (selected from Part 1) with placebo (preservative-free normal saline).

This is a Phase 2/3, multicenter, randomized, double-blind, parallel-group, placebo-controlled, dose-ranging study in subjects undergoing primary unilateral total knee arthroplasty (TKA) under general or spinal anesthesia. Note: Bupivacaine cannot be used as the spinal anesthetic.

Part 1 During Part 1 of the study, approximately 100 subjects (25 per treatment arm) will be randomized to receive a single dose injection femoral nerve block with either one of three doses of liposome bupivacaine (67, 133, or 266 mg) or placebo in 20 mL under ultrasound guidance. Preservative-free normal saline will be added to the 67 mg and 133 mg doses of study drug to achieve a volume of 20 mL.

Part 2 In Part 2 of the study, approximately 180 subjects (randomized 1:1, resulting in approximately 90 liposome bupivacaine subjects and 90 placebo subjects) will receive a single dose injection femoral nerve block with the selected dose level of liposome bupivacaine (i.e., 67, 133, or 266 mg) or placebo in 20 mL under ultrasound guidance.

Inclusion Criteria:

1. Male or female, >=18 years of age.
2. Scheduled to undergo primary unilateral TKA under general or spinal anesthesia.
3. American Society of Anesthesiologists (ASA) Physical Status 1, 2, or 3.
4. Able to demonstrate motor function by performing a 20-meter walk, unassisted with the optional use of a 4-legged walker, and sensory function by exhibiting sensitivity to cold.
5. Able to provide informed consent, adhere to the study visit schedule, and complete all study assessments.

Exclusion Criteria:

1. Currently pregnant, nursing, or planning to become pregnant during the study or within 1 month after study drug administration. Female subjects must be surgically sterile, at least 2 years menopausal, or using an acceptable method of birth control.

   If of childbearing potential, must have a documented negative pregnancy test within 24 hours before surgery.

2. Planned concurrent surgical procedure (e.g., bilateral TKA).

3. Use of any of the following medications within the times specified before surgery:

   long-acting opioid medication, NSAIDs, aspirin (except for low-dose aspirin used for cardioprotection) or acetaminophen within 3 days, or and any opioid medication within 24 hours.

4. Concurrent painful physical condition or concurrent surgery that may require analgesic treatment (such as an NSAID or opioid) in the postsurgical period for pain that is not strictly related to the surgical site administered study treatment, and which may confound the postsurgical assessments (e.g., significant pain from other joints including the non-index knee joint, chronic neuropathic pain, prior contralateral TKA, concurrent foot surgery).

5. Initiation of treatment with any of the following medications within 1 month of study drug administration or if the medication(s) are being given to control pain: selective serotonin reuptake inhibitors (SSRIs), selective norepinepherine reuptake inhibitors (SNRIs), gabapentin, pregabalin (Lyrica®), or duloxetine (Cymbalta®).

6. Current use of systemic glucocorticosteroids within 1 month of enrollment in this study.

7. Body weight < 50 kilograms (110 pounds) or a body mass index ≥ 40 kg/m2.

8. Contraindication to hydromorphone, oxycodone, or bupivacaine.

9. Administration of an investigational drug within 30 days or 5 elimination half-lives of such investigational drug, whichever is longer, prior to study drug administration, or planned administration of another investigational product or procedure during the subject's participation in this study.

10. Previous participation in a liposome bupivacaine study.

11. History of, suspected, or known addiction to or abuse of illicit drug(s), prescription medicine(s), or alcohol within the past 2 years.

12. Failure to pass the urine drug screen.

13. Uncontrolled anxiety, schizophrenia, or other psychiatric disorder that, in the opinion of the Investigator, could interfere with study assessments or compliance.

14. Malignancy in the last 2 years, with the exception of non-metastatic basal cell or squamous cell carcinoma of the skin or localized carcinoma in situ of the cervix.

15. Current or historical evidence of any clinically significant disease or condition, especially cardiovascular or neurological conditions that, in the opinion of the Investigator, may increase the risk of surgery or complicate the subject's postsurgical course.

16. Significant medical conditions or laboratory results that, in the opinion of the Investigator, indicate an increased vulnerability to study drugs and procedures.

17. Subjects who are planned to receive Entereg® (alvimopan).

18. Subjects who will receive prophylactic antiemetics or planned postsurgical antiemetics given without regard to the subject's emesis needs.

19. Use of dexmedetomidine HCl (Precedex®) within 3 days of surgery.