Merck and Glenmark Accused of Overcharging Consumers by Delaying Generic Alternatives to Zetia

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A proposed class action has been filed against a group of pharmaceutical companies claiming they conspired to delay the entrance of generic alternatives to Zetia into the market, thereby overcharging consumers by “tens of millions of dollars.” The suit names the following defendants:

According to the suit, Merck developed Zetia in the early 1990s as “a cholesterol drug that counteracts plaque development in arteries” and controlled the market for the medicine until 2006, when Glenmark attempted to introduce a generic alternative. Merck allegedly sued Glenmark for patent infringement and eventually settled the lawsuit in May 2010. Under the settlement, the complaint alleges, Glenmark agreed to delay the entrance of its generic version of Zetia for several years – until December 2016 – and Merck agreed to refrain from selling its own generic alternative – an “authorized generic” – for 180 days after Glenmark’s drug entered the market. Under the Hatch-Waxman Act, the complaint explains, the first manufacturer to submit an application for a new generic drug would be granted a 180-day exclusivity period during which other generic competitors would be prohibited from entering the market, meaning the only competition would come from the brand-name drug and an authorized generic.

The suit argues that this trading of “monopoly for monopoly” allowed the defendants to enjoy a period of time during which they could reap significant profits from selling their drugs with limited competition, causing consumers to pay higher prices than they would have in a competitive market.