Centene, Humana sue Merck over alleged ‘pay-for-delay’ drug deal


Two health insurance companies have filed suit against Merck, alleging the pharmaceutical manufacturer conspired with generic competitors to prevent lower-cost drugs from entering the market.

Insurers Humana and Centene filed separate lawsuits in the U.S. District Court of New Jersey Wednesday. Both claim Merck’s “pay-for-delay” tactics caused them to overpay for cholesterol medications Vytorin and Zetia by hundreds of millions of dollars. The complaints come just three months after the Kaiser Foundation Health Plan sued Merck, accusing the company of breaking antitrust laws in multiple states by delaying the launch of lower-cost generic drugs.

Merck did not respond to an interview request. Generics manufacturer Glenmark Pharmaceuticals and Merck subsidiary Schering-Plough are also listed as defendants.

Humana and Centene, along with Centene subsidiaries WellCare Health Plans, Fidelis Care and Health Net, allege Merck improperly listed patents for Vytorin and Zetia, which delayed competitors’ development of substitutes for the high-cost drugs, the lawsuits say.

After Glenmark Pharmaceuticals developed generics, the two drugmakers entered a “quid pro quo” agreement, the complaints say. According to the plaintiffs, Glenmark agreed to drop a patent challenge against Merck in exchange for the pharma giant promising not to launch competitors during Glenmark’s 180-day generic market exclusivity period. Glenmark and Merck’s illicit contract also prevented at least five other generics from reaching pharmacies, the lawsuits claims.

“There was and is a gross and unconscionable disparity between the prices that Humana paid for the drugs at issue, and the value received, given that more cheaply priced drugs should have been available,” the Humana lawsuit says.

The insurers accuse Merck of violating antitrust laws in at least 27 states and the District of Columbia, breaking states’ unfair competition and consumer protection laws, engaging in unjust enrichment and taking part in a monopolistic scheme. Both insurers are asking the court for treble damages, equitable relief from the pharmaceutical companies’ unjust enrichment, court costs and attorneys fees and any other relief deemed just and proper.

Humana and Centene are demanding a jury trial. Both are represented by the law offices of Crowell & Moring LLP.



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