Labaton Sucharow Files Class Action Against Merck and Glenmark Alleging Pay-for-Delay Agreement for Cholesterol-Lowering Drug, Zetia

NEW YORK (February 2, 2018) –  Labaton Sucharow LLP announced it has filed a class action lawsuit on behalf of UFCW Local 1500 Welfare Fund for claims under federal and state antitrust laws to recover damages and obtain injunctive and equitable relief for injuries sustained against defendants Merck & Company, Inc., Merck Sharp & Dohme Corporation, Schering-Plough Corporation, Schering Corporation, and MSP Singapore Company LLC (collectively, Merck), and Glenmark Pharmaceuticals Limited and Glenmark Generics Inc., (collectively, Glenmark). The plaintiff’s claims stem from the defendants’ anticompetitive scheme to raise prices in the market for blockbuster cholesterol-lowering drug, Zetia, and its generic equivalents sold in the United States.

Glenmark was the first manufacturer to file for FDA approval to market a generic version of Zetia. Merck sued Glenmark for infringing on its Zetia patent. The parties litigated the patent infringement suit for more than three years, but rather than proceed to trial, the parties ultimately settled. As part of the settlement, Glenmark agreed to stay out of the generic market for Zetia for nearly five years. Merck, in turn, agreed not to launch its own “authorized generic” (AG) version of Zetia during that five year period and six months thereafter. Therefore Glenmark was the exclusive generic manufacturer during that six-month period, and Merck’s no-AG agreement was worth an additional $800 million in sales to Glenmark.

In the absence of this unlawful pay-for-delay agreement, the plaintiff alleges Glenmark and Merck would have each launched a generic version of Zetia as early as December 6, 2011, ending Merck’s monopoly and bringing competition and lower prices to third-party payers and consumers five years earlier. Instead, as a result of the unlawful agreement, drug purchasers likely paid hundreds of millions in overcharges.

The case is UFCW Local 1500 Welfare Fund v. Merck & Co., Inc., No. 18-cv-00763 (E.D.N.Y.). A copy of the filed complaint can be found here.