Bausch pays whopping $300M to settle Glumetza pay-for-delay lawsuit after 800% price hike

Bausch Health, which industry watchers may remember by its former name Valeant, has been riddled in controversy for years over its defense of diabetes med Glumetza. Now, the company will pay millions to put those charges to rest. 

Bausch has agreed to dish out $300 million to settle a 2019 lawsuit that claimed the Canadian drugmaker paid off its generic rivals nearly a decade ago, allowing the company to jack up prices for the type 2 diabetes heavyweight by 800% shortly thereafter, according to a Wednesday court filing. 

The case, brought on as a class action by direct purchasers of the diabetes med, was scheduled to go to trial next month. Lawyers for the plaintiffs, which are now asking the U.S. District Court for the Northern District of California to approve the settlement, said the deal amounts to one of the largest recoveries in a direct-purchaser class lawsuit in a reverse payment case. 

Bausch’s troubles date all the way back to 2005 when the FDA first approved Glumetza, a once-daily extended-release version of metformin, owned by Depomed (now known as Assertio) and Santarus, which Bausch later acquired. The Glumetza version of metformin is intended to come with fewer gastrointestinal side effects. 

Assertio attempted to create a lawful patent wall around its newly approved extended-release version of the drug, given that the company couldn’t patent metformin itself, the lawsuit claimed. Except the patents were “both weak and easy to design around,” the plaintiff lawyers argued. 

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Enter Lupin Pharmaceuticals, which created its own generic version of Glumetza set to launch in late 2012. However, the lawsuit alleged that Assertio and Santarus entered what’s known as a “pay-for-delay” deal with Lupin, pushing its market entry back until 2016. 

That allowed the companies to jack up the price for Glumetza by nearly 800% in 2015, jumping from $5.72 per tablet to $51 just a few months later, according to the lawsuit. By 2016, Glumetza was raking in roughly $1.2 billion, according to the lawsuit. 

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In Wednesday's filing, lawyers representing the Glumetza buyers said the $300 million “represents an excellent result.” The deal follows a May ruling from U.S. District Judge William Alsup that said Bausch, Lupin and Assertio had to face a jury over the antitrust violation claims.

Assertio has also settled with undisclosed terms, while Lupin is set to go to trial in October, Reuters reports.