No matter how you slice it, this is a repudiation of “Fast” Fred Hassan’s gouging / predatory theories of pharma product management (now getting on over 15 years past — but still despicable, on a life-saving medicine).

And as we’ve long predicted, these are indeed boxcar numbers, for what could likely be proved to be violations of antitrust law, in blocking the arrival of generic competition to the US marketplace (i.e., the very same strategy Martin Shkreli, albeit far more ham-handedly copied and deployed). In Shkreli’s case, the ensuing federal litigation by the FTC and state AGs, in Manhattan, has resulted in his life time banning, from any and all pharma companies, by USDC Judge Denise Cote (now awaiting oral argument on Martin’s appeal in the Second Circuit) — in what amounts to a complete win, for the FTC.

In any event, here is the entire financial footnote (pages 18-19), in context — but until we see the four insurers dismiss their claims in Norfolk, Virginia — we should assume the entire cost of this litigation is going to eclipse $1 billion — especially if we factor in the legal fees spent defending four more federal trials.

…As previously disclosed, Merck, Merck Sharp & Dohme, LLC. (MSD), Schering Corporation, Schering-Plough Corporation, and MSP Singapore Company LLC (collectively, the Merck Defendants) are defendants in a number of lawsuits filed in 2018 on behalf of direct and indirect purchasers of Zetia alleging violations of federal and state antitrust laws, as well as other state statutory and common law causes of action. The cases were consolidated in a federal multidistrict litigation (the Zetia MDL) before Judge Rebecca Beach Smith in the Eastern District of Virginia.

In November 2019, the direct purchaser plaintiffs and the indirect purchaser plaintiffs filed motions for class certification. In August 2020, the district court granted in part the direct purchasers’ motion for class certification and certified a class of 35 direct purchasers. In August 2021, the Fourth Circuit vacated the district court’s class certification order and remanded for further proceedings consistent with the court’s ruling. In September 2021, the direct purchaser plaintiffs filed a renewed motion for class certification. In April 2022, the district court denied the direct purchaser plaintiffs’ renewed motion for class certification. In August 2021, the district court granted certification of a class of indirect purchasers.

In 2020 and 2021, United Healthcare Services, Inc., Humana Inc., Centene Corporation and others, and Kaiser Foundation Health Plan, Inc. (collectively, the Insurer Plaintiffs), each filed a lawsuit in a jurisdiction outside of the Eastern District of Virginia against the Merck Defendants and others, making similar allegations as those made in the Zetia MDL, as well as additional allegations about Vytorin. These cases have been transferred to the Eastern District of Virginia to proceed with the Zetia MDL and remain pending.

In February 2022, the Insurer Plaintiffs filed amended complaints. In March 2022, the Merck Defendants, jointly with other defendants, moved to dismiss certain aspects of the Insurer Plaintiffs’ complaints, including any claims for Vytorin damages. That motion to dismiss the Vytorin-related claims is still pending.

In April 2022, the direct purchaser plaintiffs moved for an order setting a deadline for direct purchasers of Zetia not currently parties to the case to file cases against defendants in order for those cases to be coordinated for trial with the existing direct purchaser plaintiffs and other MDL plaintiff groups. The court granted that motion, setting a deadline of June 30, 2022 for unnamed direct purchasers to file claims. On June 30, 2022, 23 new entities, many related, brought new complaints against defendants or otherwise sought to intervene.

On February 10, 2023, the district court denied the Merck Defendants’ and Glenmark Defendants’ motions for summary judgment. In April 2023, the Merck Defendants reached settlements with the direct purchaser and retailer plaintiffs and a proposed settlement, subject to court approval, with the indirect purchaser class. Under these agreements, Merck will pay $572.5 million to resolve the direct purchaser, retailer, and indirect purchaser plaintiffs’ claims, which was recorded as an expense in the Company’s first quarter 2023 financial results….

Now you know — and this number is now very likely to head northward, as the four insurers go to trial, around the country — in federal courthouses. And yes (per my whimsical masthead), this is Fred Hassan — and Martin Shkreli — now enduring “The Revenge of the Sixth“. Smiling… into a warm, clear Spring morning — excellent here; Derby tomorrow!

नमस्ते