The Kaiser Foundation Health Plan has sued pharmaceutical giant Merck & Co., alleging that it colluded with an Indian drug manufacturer to prevent a generic pair from entering the market.
Kenilworth, NJ, Merck did not immediately respond to an interview request. But in Kaiser’s suit, Merck was accused of “late payment.”
According to a lawsuit filed in the Northern California District Court on July 16, Kaiser initially sued Merck in San Francisco. Supreme Court in June before transferring the case to federal court.
A health insurance plan in Oakland, California has charged Merck with antitrust violations in California, Washington DC, Hawaii and Oregon. The Kaiser also accused Merck and manufacturer Glenmark Pharmaceuticals of violating state laws by conspiring to monopolize and restrict trade, and of conducting unfair and deceptive trading practices that led to unjust enrichment. The complaint said the two pharmaceutical companies had entered into a quid pro quo, with Glenmark agreeing to drop the patent lawsuit against Merck. The pharmaceutical giant, in turn, allegedly promised not to launch generic competitors during the 180-day exclusivity period for Glenmark.
Deals with payment for deferral entered the public consciousness during Senator Amy Klobuchar’s (Minnesota) failed presidential campaign in 2019. During several debates, Klobuchar spoke out against pharmaceutical companies compensating generic competitors for delaying marketing their versions of cheaper, branded drugs. prescribing drugs, leaving patients with no choice but to pay for more expensive prescriptions.
Klobuchar now Co-sponsor of the bipartisan Senate Bill the goal of which is to end this practice, also known as chargeback transactions. The FTC estimates that these agreements result in Americans pay $ 3.5 billion in higher drug prices every year.
In 2019, California became the first state in the country to enact a ban on late payments in the pharmaceutical industry, and lawmakers passed legislation declaring pharmaceutical company chargebacks “allegedly anti-competitive.” An industry group representing generic drug manufacturers has fought the law since its inception, with the Affordable Drugs Association most recently called for a California judge act at the end of June about his repeated challenge to the law.
California law imposes fines of up to $ 20 million for drug company violations. State law is more aggressive with regards to chargebacks than the landmark 2013 U.S. Supreme Court ruling in FTC v. Actavis, which found late payments could violate antitrust laws.
The FTC argues that its Actavis decision has led to a decrease in the number of investigations into federal delay payments in recent years, although the number of settlements between manufacturers and manufacturers of generics remains high.
Since original medicines are protected by patents, generic companies must confirm that they will not sell them until all relevant patents have expired, or challenge the manufacturer’s existing patents. If the generic is challenging the patents of a well-known manufacturer, the creator can, in turn, sue the generic company for patent infringement. In these cases, companies often make settlements: in fiscal 2017, 226 settlements were concluded between pharmaceutical companies and their generic counterparts, which essentially corresponds to the level of the previous year, according to data the most recent federal data. Most of these agreements, or 169, limited the generic manufacturer’s ability to sell their product, but did not contain explicit or potential compensation.
Twenty of these agreements offered explicit compensation to generic companies for delaying their drugs to market, as well as restrictions on the sale of generics for a specified period of time. For the first time since fiscal 2004, none of these agreements contained agreements to discontinue the sale of authorized generics.