Class Action: Drug Makers Conspired to Overcharge for Diabetes Medication Glumetza [UPDATE]
by Erin Shaak
Last Updated on August 19, 2020
Meijer, Inc. et al. v. Bausch Health Companies Inc. et al.
Filed: September 18, 2019 ◆§ 3:19-cv-05822
A proposed class action lawsuit out of California claims the prices of type 2 diabetes medication Glumetza and its generic version have skyrocketed due to an anticompetitive conspiracy executed by the drugs’ manufacturers.
Lupin Pharmaceuticals, Inc. Bausch Health Companies Inc. Salix Pharmaceuticals, Ltd. Salix Pharmaceuticals, Inc. Santarus, Inc. Assertio Therapeutics, Inc. Lupin Ltd.
California
Case Updates
August 19, 2020 – Class of Direct Glumetza Buyers Certified by Calif. Judge
United States District Judge William Alsup has granted certification to a class of direct buyers of Glumetza and its generic version who lawsuits claim were harmed by an exorbitant price spike for the diabetes drug.
According to Judge Alsup’s August 15 certification order, which pertains to consolidated litigation comprised of seven antitrust lawsuits, the class is defined as all persons or entities in the United States and its territories who directly purchased Glumetza or generic Glumetza from a defendant (listed above) from May 6, 2012 until the effects of the defendants’ conduct ceased.
Update—October 1, 2019—Two More Class Actions Filed Over Allegedly Anticompetitive Glumetza Pricing Conspiracy
Two more proposed class action lawsuits have been filed against the makers of diabetes treatment Glumetza over an allegedly anticompetitive “pay-for-delay” scheme. The complaints, brought respectively by Bi-Lo, LLC and Winn Dixie Logistics, Inc., and UFCW Local 1500 Welfare Fund, allege the defendants illegally conspired to keep generic alternatives to Glumetza off the market in order to maintain artificially high prices for the drug. The addition of these two complaints in the Northern District of California brings the reported total number of class actions against the Glumetza manufacturers to five.
A proposed class action lawsuit out of California claims the prices of type 2 diabetes medication Glumetza and its generic version have skyrocketed due to an anticompetitive conspiracy executed by the drugs’ manufacturers. Alleging violations of federal antitrust laws, the 66-page lawsuit claims defendants Bausch Health Companies Inc.; Assertio Therapeutics, Inc.; Santarus, Inc.; Lupin, Ltd.; and several subsidiaries conspired to delay the availability of generic alternatives to Glumetza, which caused consumers to pay supracompetitive prices for the drug.
The timeline in the lawsuit begins when Assertio Therapeutics developed Glumetza, an extended-release form of metformin used to prevent and control high blood sugar in patients with type 2 diabetes, in 2005. After Lupin developed a generic alternative to the drug, Assertio, the case explains, sued its competitor for patent infringement, triggering an automatic 30-month delay for the generic’s entrance into the market.
In February 2012, just before the 30 months were up, the drug makers settled the lawsuit with what’s known as a “reverse payment,” the case says. As part of the settlement, the suit says, Assertio and its marketing partner, Santarus, agreed to pay Lupin to keep its generic alternative off the market until February 2016. In exchange, the case states, the companies would delay the entrance of their own generic version of Glumetza until six months after Lupin entered the market, allowing Lupin to enjoy a period of exclusivity with no generic competition. The lawsuit charges that this anticompetitive activity violated federal law.
“Those Defendants allocated the Glumetza market between them: Assertio/Santarus got the entire market from 2012 to February 2016, and Lupin got the generic sector of the market from February 2016 until at least August 2016,” the complaint reads. “That market-allocation agreement is blatantly unlawful under antitrust law.”
The suit says the settlement agreement also included “deterrent provisions” aimed at keeping other generic competitors from foiling the drug makers’ plan. The provisions allegedly provided that if another generic competitor entered the market before February 2016, Lupin could also enter on that date without Assertio/Santarus granting a license to any other generic manufacturer until 180 days after Lupin’s entrance.
According to the lawsuit, the effect of the defendants’ conspiracy was that the price of Glumetza was inflated to more than 50 times what it would have been in a competitive market.
“Fair competition would have limited the price of a 30-day supply of diabetes prescription drug Glumetza to less than $55. Defendants instead were able to charge more than $3,000 for the brand version and more than $2,200 for the generic version,” the complaint states.
The profits generated from this alleged conspiracy allowed Assertio/Santarus to enter into various transactions that eventually saw the Glumetza monopoly sold to Valeant Pharmaceuticals, Inc. (which is now known as Bausch Health) for $14.5 billion, the lawsuit alleges.
According to the complaint, the direct purchasers of Glumetza such as the plaintiff shouldered the costs of the defendants’ anticompetitive scheme, and have overpaid for the drug by more than $2.8 billion.
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