Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Producer of Mucinex cold remedy charged with delaying generic competition, (Feb 5, 2015)

By Linda O’Brien, J.D., LL.M.

A consumer products company has engaged in exclusionary and anticompetitive conduct in the market for an extended-release over-the-counter expectorant by withholding supply of its authorized generic in violation of a patent infringement settlement agreement the company made with a generic drug manufacturer, according to a complaint filed in the federal district court in Philadelphia on February 3 (URL Pharma, Inc. v. Reckitt Benckiser Inc., No. 2:15-cv-00505-PBT).

In 2007, multinational consumer goods company Reckitt Benckiser held the patent for the only FDA-approved form of extended-release guaifenesin (ERG), an over-the-counter expectorant. Reckitt sold the drug under the brand name Mucinex. Reckitt sued generic drug manufacturer Mutual Pharmaceuticals for patent infringement, after Mutual planned to sell a generic version of ERG. The parties entered into a settlement agreement in which Mutual was required to refrain from entering the ERG market until another generic drug manufacturer began offering generic ERG. In that event, Reckitt agreed to supply an authorized generic ERG to Mutual so that Mutual would also be able to enter the generic ERG market.

The complaint states that, in October 2013, a third party, Perrigo Company, began to legally sell a generic version of Mucinex® 600 mg ERG, which triggered Reckitt’s obligation to supply its ERG product to Mutual. Although Mutual provided Reckitt with written notice that it was electing to purchase from Reckitt ERG product for resale, Reckitt has continuously refused to supply such tablets to Mutual.

In refusing to meet its obligation under the settlement agreement to supply Mutual with its ERG product, Reckitt has improperly extended its monopoly in the ERG market, it was alleged. Even though Reckitt stands to pay contract damages to Mutual for its repudiation of the settlement agreement, its monopoly prices and profits obtained therefrom far exceed what the generic ERG price and profits would be. Had Mutual been in a position to supply the market with a competing product at competitive prices, both Mutual and consumers of ERG products would have enjoyed substantial economic benefits, the complaint charged.

According to the complaint, other available cold and cough remedies work differently to help mask symptoms of cold and flu and are not acceptable substitutes for guaifenesin. Although many manufacturers have marketed immediate-release guaifenesin, only Reckitt has marketed and sold ERG. Thus, Reckitt has been able to charge significantly more for its ERG products than manufacturers selling immediate-release guaifenesin. However, Reckitt’s ability to charge monopoly prices would have been reduced or eliminated had Reckett supplied Mutual with its ERG product beginning in October 2013, when it was obligated to do so.

The plaintiffs assert claims for monopolization and attempted monopolization in violation of Section 2 of the Sherman Act. The action seeks declaratory injunctive relief, specific performance, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:15-cv-00505-PBT.

Attorneys: John J. Grogan and Howard I. Langer (Langer Grogan & Diver, PC) for URL Pharma, Inc., Mutual Pharmaceutical Company, Inc., and United Research Laboratories, Inc.

Companies: URL Pharma, Inc.; Mutual Pharmaceutical Company, Inc.; United Research Laboratories, Inc.; Reckitt Benckiser Inc.

News: Antitrust PennsylvaniaNews