Insurer Suits Take Aim at 'Pay for Delay'

by Leslie Small

 

In recently filed lawsuits, two major health insurers accuse pharmaceutical companies of engaging in "pay-for-delay" deals, in which drug manufacturers sidestep competition for their branded products by offering patent settlements that effectively pay generic manufacturers not to bring their products to market.

The plaintiffs' claims:

• Humana Inc. and Centene Corp., in separate lawsuits filed in New Jersey's District Court on Sept. 22, accuse Merck & Co., Inc. of conspiring with generic manufacturers to delay the market entry of generic substitutes for two blockbuster cholesterol drugs, Vytorin and Zetia.
• As a result of what the lawsuits call a "monopolistic scheme" and an "anticompetitive agreement" with generic manufacturer Glenmark Pharmaceuticals Ltd., both drugmakers allegedly unjustly enriched themselves and forced health plans like Centene and Humana to overpay by "hundreds of millions of dollars" for their members' Zetia and Vytorin prescriptions.

Policymakers target pay-for-delay:

• "Pay-for-delay is definitely a policy focus right now," says Ge Bai, Ph.D., an associate professor at Johns Hopkins University's Carey Business School and Bloomberg School of Public Health. In fact, the House Judiciary Committee on Sept. 29 advanced four bills aimed at banning anticompetitive drugmaker practices — including pay-for-delay patent deals. The Senate Judiciary Committee approved similar measures in July.
• Such developments are important because even though there have been multiple lawsuits challenging pay-for-delay practices, the practice continues, Bai points out, adding "that tells us that those lawsuit settlements won't fundamentally change the behavior of the brand name drug manufacturers."

New law could influence lawsuits:

• If Congress does end up explicitly banning pay-for-delay deals, there could be implications for litigation regarding the practice, says Robert Field, a professor of law and health management and policy at Drexel University.
• "It would certainly make claims easier to bring," he says. "Prospectively, I think it would have an important effect. What it would do for claims over past or current practices remains to be seen, but it would certainly make enforcement easier going forward and presumably change behavior in this regard."
• In addition, "cases currently in the pipeline might be affected, or at the least existing arrangements might be terminated," Field adds.

From Health Plan Weekly