On Wednesday, drug manufacturer Merck & Company, Inc. (and its related companies) and Glenmark Pharmaceuticals Ltd. were sued in New Jersey federal court over allegations of state and federal antitrust violations and common-law claims, all concerning generic versions of the cholesterol-reducing drugs Zetia and Vytorin.
The health-care companies bringing the lawsuit allege that Merck and Glenmark collectively prevented and delayed the release of lower-cost, generic versions of the two drugs, with each drug ”consistently generating more than $1 billion in sales per year (and more than $2 billion in some years).”
Plaintiff healthcare companies Centene Corporation; WellCare Health Plans, Inc.; New York Quality Healthcare Corporation dba Fidelis Care; and Health Net, LLC allege that when Zetia’s exclusivity period neared its end, Merck’s competitor Glenmark sought to “launch a generic to compete with Zetia.” Merck then filed a patent-infringement suit against Glenmark, even though Merck allegedly “admitted its lawsuit had no merit,” since the company failed to disclose prior art to the United States Patent and Trademark Office (USPTO). But by filing the lawsuit, the complaint claims that “Merck triggered a 30-month stay” that precluded the FDA from approving Glenmark’s competitive drug.
In the interim, the complaint alleges that Glenmark dropped its meritorious defenses to Merck’s patent-infringement claims, instead reaching a settlement that reduced generic-version competition. Plaintiffs contend that Glenmark settled the lawsuit with Merk under terms where Glenmark dropped its patent-infringement defenses, and where “Merk agreed to refrain from competing with Glenmark by not introducing its own authorized generic version of Zetia” for 180 days.
As a result of that agreement, plaintiffs claim that “Merck reaped billions of dollars in additional sales of Zetia and Vytorin,” and “Glenmark also reaped millions of dollars in additional profits” — which were paid by health plans like the plaintiffs. Specifically, plaintiffs claim that Centene “had overpaid by hundreds of millions of dollars,” and that overpayment continued “due to the delay-inflated drug prices and the lack of competition associated with Merck’s agreement not to launch” a generic version.
The claims allege violations of 29 states’ laws, including laws prohibiting monopoly, conspiracy to monopolize, conspiracy to restrain trade, unfair and deceptive trade practices, monopolistic scheme, and unjust enrichment.
The plaintiffs are represented by Crowell & Moring LLP.