Zetia buyers secure backing for ‘market narrowing’ in MSD antitrust case
Wholesale buyers of the cholesterol treatment Zetia have won the backing of a US judge for their market definition in an antitrust suit against MSD (known as 'Merck & Co' in the US) and Glenmark.
On Monday, November 1, Judge Douglas Miller recommended that the US District Court for the Eastern District of Virginia grant a partial summary judgment that sought to narrow the market under scrutiny in the long-running antitrust case.
The dispute centres on the buyers’ allegation that MSD and Glenmark violated competition law by collaborating to prevent a generic version of Zetia from being brought to market.
Background
In 2006, Glenmark sought to market a generic version of Zetia, prompting MSD to file a lawsuit against the company for the alleged infringement of a patent set to expire in April 2017.
Both MSD and Glenmark settled their lawsuit with an agreement that allowed Glenmark to launch its generic drug in 2016.
But a group of direct purchasers accused MSD and Glenmark of breaking antitrust law with the “pay-for-delay” settlement, filing a complaint in 2018.
The buyers alleged that MSD had agreed to drop the infringement suit over the Zetia generic if Glenmark agreed not to release its variant until after the patents expired.
MSD and Glenmark claimed that there was no such agreement and that it chose to discount its branded drug when Glenmark first launched its generic version, which is not prohibited under the Hatch-Waxman Act.
The buyers requested a partial summary judgment that the relevant antitrust market is limited to Zetia and its AB-rated generic equivalents sold in the US and its territories.
No evidence of ‘cross-price elasticity of demand’
The pharmaceutical companies countered that “Zetia competed in a broad, competitive market for cholesterol-lowering medications”.
The matter was referred to Judge Miller for a report and recommendation, who proceeded to rebuff the defendant’s argument that the market definition is a "highly complex and fact-laden question not susceptible to summary judgment”.
The companies also accused the buyers of drawing the relevant market so narrowly that the relevant market is only the product itself, but the judge noted that antitrust law permits a one-product market where the product is truly “unique” and “not interchangeable with [any] other product”.
He also found that the settlement agreement underlying the plaintiffs' claims targeted only the market for Zetia and the generic, ezetimibe, and the defendants produced no evidence of substantial “cross-price elasticity of demand” between Zetia and any products other than ezetimibe.
He concluded that the buyers had satisfied their burden in showing that there were no material disputed facts concerning the scope of the relevant product market within which to evaluate the anti-competitive effects of the disputed settlement agreement.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox.
