Gilead, Merck and others slapped with 'pay-for-delay' lawsuits over lucrative HIV and cholesterol meds

A number of Big Pharma companies, including Gilead and Merck, engaged in what’s known as “pay-for-delay” deals, settling with up-and-coming generic rivals to stall their market entry and costing drug buyers hundreds of millions in lost savings as a result, a handful of high-profile new lawsuits claim. 

Pharma watchers are likely familiar with so-called "pay-for-delay" deals, which have come under intense scrutiny from federal regulators and have been the subject of numerous court battles over the years. As for Gilead, its lucrative HIV business has already been at the center of numerous disputes, with critics claiming the company used its monopoly to curb generics and retain lofty prices. 

In a new case, two of the nation’s largest pharmacy chains—CVS and Ride Aid—are going head-to-head with Gilead, Bristol Myers Squibb (BMS) and Teva for engaging in a “multifaceted scheme to suppress and delay” generic rivals of Gilead’s HIV meds, according to a filing in the U.S. District Court in San Francisco on Wednesday. 

RELATED: Gilead schemed with J&J, Bristol-Myers to keep their HIV combo monopoly, lawsuit claims

The pharmacy chains allege the band of drugmakers engaged in unlawful reverse-payment deals for a number of Gilead bellwether HIV meds, including Viread, Truvada, Atripla, Descovy and Vemlidy. Those deals resulted in drug purchasers overpaying for those drugs by “hundreds of millions of dollars,” CVS and Rite Aid claim.

The lawsuit centers around Gilead’s tenofovir disoproxil fumarate (TDF), tenofovir alafenamide fumarate (TAF) and emtricitabine (FTC)-based meds. Gilead holds either patents or exclusive licenses to the technology for those drugs, which suppress the virus in HIV-positive patients or can be used as a pre-exposure prophylaxis, the suit says.

The plaintiffs claim the drugmakers worked together to fend off small generic competitors and position Teva at front of the line to launch copycats for certain HIV drugs. All the while, Gilead reaped profits from generic delays, the suit claims.

In a statement to Fierce Pharma, Gilead said the lawsuit filed against the company "distorts and misstates Gilead’s history, its collaborations with its partners, and its settlement agreements." The company said the claims are "without merit." 

As for Merck, the New Jersey drugmaker is facing separate lawsuits from two major insurance companies—Centene and Humana—blaming the company for deploying similar tactics for its cholesterol meds Vytorin and Zetia. Generic makers Glenmark Pharmaceuticals and Merck’s Schering-Plough are also listed as defendants in both cases. 

Merck incorrectly listed its patents and delayed generic rivals by entering into a “pay-for-delay” deal with Glenmark, which resulted in the insurers overpaying by “hundreds of millions of dollars” for the pair of meds, the lawsuits claim. Both insurers are represented by the same law firm, Crowell & Moring LLP. 

RELATED: Kaiser health plan files 'pay for delay' suit against Merck over cholesterol drugs

Meanwhile, Zetia “quickly became a steady source of enormous profits for Merck,” reaping blockbuster U.S. sales of about $1 billion in 2010 and growing to $1.6 billion by 2016, according to the lawsuits.

The pair are seeking “damages for overcharges they paid as a direct result” of Merck’s conduct, the lawsuits say. 

Representatives for Merck didn't immediately respond to requests for comment.