Antitrust Law Daily Wrap Up, ANTITRUST—D.N.J.: Merck granted dismissal of most claims alleged by Humana and Centene, (Jan 2, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

Claims by two managed healthcare companies relating to settlement between a proprietary Big Pharma patentee and a generic manufacturer mostly dismissed, but remain open for amendment.

In two mostly verbatim separate decisions, a federal district court has partially denied a joint motion by proprietary pharmaceutical manufacturer Merck and generic drug manufacturer Glenmark to dismiss certain antitrust claims respectively brought by managed healthcare companies. The cases had been remanded from multidistrict litigation over the case settlement of a patent infringement claim brought by Merck against Glenmark. The per se monopoly claim and the Sherman Act conspiracy claim were dismissed with prejudice. The claims relating to Merck's patent infringement claim against Mylan in connection with a different but related cholesterol reducing drug survived dismissal. All other claims were dismissed without prejudice, paving the way for amendment (Humana Inc. v. Merck & Co., Inc., No. 2:23-cv-23023-BRM-LDW (D.N.J. Dec. 30, 2024) and (Centene Corp. v. Merck & Co., Inc., No. 2:23-cv-23033-BRM-LDW (D.N.J. Dec. 30, 2024)).

Background. Merck & Company and related entities (Merck) held a patent to the chemical compound ezetimibe, which Merck marketed as an anti-cholesterol drug under the name Zetia®. In 2009, Merck sued India-based Glenmark Pharmaceuticals Ltd and related companies (Glenmark) for patent infringement in connection with Glenmark's application to the FDA for approval of a generic version of ezetimibe. That case was settled in 2010, per an agreement that, inter alia, gave Glenmark a period of exclusivity to market its generic ezetimibe (the Zetia settlement).

Later in 2009, Merck sued generic drug manufacturer Mylan for patent infringement in connection with its FDA application for approval of a generic version of Vytorin®®, another Merck proprietary drug that contains ezetimibe and simvastatin. Merck ultimately prevailed on that lawsuit. Several antitrust lawsuits were subsequently filed against Merck and Glenmark; these were consolidated for multidistrict litigation in the Eastern District of Virginia [In re: Zetia (Ezetimibe) Antitrust Litigation, case No. 2:18-md-02836 (E.D. Va.)].

Managed healthcare companies Humana Inc. (Humana) and Centene Corp. (Centene) and their respective relevant subsidiaries each filed a lawsuit against Merck, Glenmark, and others on September 22, 2021, alleging antitrust violations in connection with the Zetia® settlement agreement. Humana and Centene were represented by the same counsel in those cases. Within a month, those two cases were transferred to the Eastern District of Virginia for the ongoing multidistrict litigation proceedings there.

The two cases were remanded to the District of New Jersey on December 12, 2023. Merck moved for partial dismissal of the claims.

Per se monopoly claim. The court granted dismissal of the plaintiffs' claim that the Zetia settlement was a per se violation of the Sherman Act. Here, those claims had been dismissed during the multidistrict phase of the litigation, and Humana and Centene had each stipulated that the multidistrict decisions were binding to their cases. The per se monopoly claim was thus dismissed with prejudice.

Vytorin®-related claims. The court denied dismissal of the plaintiffs' federal law claims related to their payments of "artificially high prices not only for generic and brand-name Zetia but also for Vytorin®," but granted dismissal of the state law claims. Here, Humana and Centene had each pleaded a "sufficient causal chain" that was common in an industry as complex as Big Pharma. The allegations were supported by evidence that went "beyond mere speculation," including internal communications of the defendants.

There were sufficient allegations that generic manufacturers, including Humana and Centene, were the intended targets of the defendants' agreement which, per the drug patent rules, effectively delayed market entry to generic manufacturers other than Glenmark.

The state law claims, however were not sufficiently pleaded, and were dismissed without prejudice to replead.

Federal antitrust monopolization claims. The court granted dismissal of the so-called "Walker Process" claim that Merck's enforcement of patents fraudulently obtained was a basis for a Sherman Act Claim [Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965)]. Such a claim has a heightened allegation requirement, and the plaintiffs' claims on this score did not give sufficient detail. The court accordingly dismissed those claims without prejudice. Because the sham litigation claims by Humana and Centene were premised upon their Walker Process allegations, these, too, were dismissed without prejudice, as were the claims of an overarching monopolistic scheme.

The conspiracy to monopolize claim was dismissed with prejudice. The alleged conspiracy was between Merck and its licensee-cum-subsidiary. Entities in such relationships have a unity of interests, and cannot violate the anti-conspiracy provisions of the Sherman Act.

The cases are No. 2:23-cv-23023-BRM-LDW and No. 2:23-cv-23033-BRM-LDW.

Judge: Martinotti, B.

Attorneys: Joshua A. Druck (Gimigliano Mauriello & Maloney, P.A.) for Centene Corp. and Humana Inc. Geoffrey N. Rosamond (McCarter & English, LLP) for Merck & Co. Inc.

Companies: Humana Inc.; Centene Corp.; Merck & Co. Inc.

Cases: Antitrust NewJerseyNews