Litigation Alleging Merck’s Co-Pay Coupons and Savings Cards are Unlawful May Proceed
On June 30, 2014, Judge Michael A. Shipp of the United States District Court for the District of New Jersey denied in part a motion to dismiss in litigation against Merck & Co., manufacturer of the blockbuster drugs Nasonex, Vytorin, Zetia, Janumet/Janumet XR, and Januvia. The case—one of several pending against brand name drug manufacturers in Illinois, Pennsylvania, and New Jersey—alleges that Merck uses co-pay coupons and savings cards to subsidize the prescription drug co-payment (“co-pay”) obligations of privately-insured individuals, inducing them to choose Merck’s more expensive brand name drugs where less expensive therapeutic alternatives are available.
Judge Shipp held that the plaintiff health benefit funds sufficiently alleged standing where they contend their injuries occur at the point-of-sale, when co-pay subsidies persuade their members to fill prescriptions for Merck’s expensive drugs, and where the number of claims their members submitted for those drugs increased considerably after the co-pay subsidy programs were implemented.
He went on to find that the plaintiffs properly stated a claim for tortious interference with contract where they alleged that Pharmacy Benefit Managers retained by them enter into valid and enforceable contracts with retail pharmacies requiring those pharmacies to collect co-pays directly from patients, that Merck knew of these contracts and nevertheless induced the pharmacies to participate in its co-pay subsidy programs to plaintiffs’ financial detriment.
Judge Shipp concluded by stating that he was “unprepared to accept Merck’s characterization of the subsidy programs ‘as legitimate business activities that enabled patients to better afford their Merck medicines.’” The case will now proceed to discovery.