Par avoids pay-for-delay suit after court accepts payment was ‘fair’

A Virginia judge has approved Par Pharmaceutical’s settlement with a group of direct purchasers, allowing the pharmaceutical company to escape a pay-for-delay lawsuit.

District Judge Rebecca Smith of the US District Court for the Eastern District of Virginia concluded that the terms of the settlement were “fair, reasonable, and adequate” in her decision to dismiss Par from the suit with prejudice on Friday, March 6.

Par had originally become embroiled in the suit because it acted as India-based Glenmark’s US distributor.

Back in June 2018, a class-action suit was brought against Glenmark, Merck (known as Merck Sharp & Dohme outside the US) and Par, accusing the trio of making billions of dollars by delaying competition in the cholesterol-reducing drug ezetimibe.

The buyers alleged that Merck “earned handsome returns” off of its branded version Zetia for years but that Glenmark then aimed to challenge Merck’s monopoly and sell generic Zetia.

“Prospects for competition benefiting consumers looked bright. Merck sued for patent infringement, and Glenmark responded that the patents underlying Zetia were invalid and had been obtained through fraud. Then, on the eve of trial, with all signs pointing to a win for Glenmark, the parties settled,” according to the claim.

The resulting “sweetheart deal” involved an agreement that Glenmark and Par would forego competing for five years, said the suit, “leaving Merck as the entrenched monopolist”.

According to the buyers, after the five years were up, Merck would return the favour by not competing with its own authorised generic version of Zetia.

Par had reached the settlement with buyers in June last year, and proceedings against Par had been stayed until now.

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