Merck has been battling allegations of anticompetitive vaccine "bundling,” and this week, the company fell short in an effort to stay a lawsuit and force plaintiffs into arbitration.
In a lawsuit filed last year, Sugartown Pediatrics, a private pediatric practice in Pennsylvania, argues that the drugmaker leveraged “its monopoly power in multiple pediatric vaccine markets to maintain its monopoly power” in rotavirus vaccines after GlaxoSmithKline launched a rival shot to Merck's RotaTeq. The plaintiffs have experience in the legal area, as they previously sued Sanofi for vaccine bundling in a case that resulted in a $61.5 million settlement.
In the Merck case, the plaintiffs argue that the company held the entire U.S. rotavirus vaccine market with RotaTeq from 2006 to 2008, but when GlaxoSmithKline entered the scene with Rotarix, Merck didn’t lower its price. Instead, the company added an “exclusionary RotaTeq Bundled Loyalty Condition” to its contracts, in effect bundling the shot with other pediatric vaccines.
In a motion to dismiss, Merck said that not only did plaintiffs fail to state an antitrust claim, but the complaint showed that “Merck’s alleged pricing practices benefited plaintiffs by delivering them a superior product at lower prices, even though the only other manufacturer of a rotavirus vaccine in the United States, GSK, chose not to compete on price.”
“Plaintiffs do not allege plausible facts sufficient to demonstrate that they paid higher prices as a result of Merck’s alleged conduct,” Merck’s filing says. “To the contrary, Plaintiffs acknowledge that they paid lower prices for Merck’s vaccines as a result of the discounts they now challenge.” And Merck says the plaintiffs waited a decade to file their complaints after GSK’s Rotarix launch, so the lawsuit is “untimely.”
But at least for now, Merck's efforts to get the case thrown out have come up short. Merck moved to dismiss the case and to force the individual plaintiffs into arbitration over their purchasing agreements, but the judge said this week that the lawsuit may proceed.
The plaintiffs previously sued Sanofi Pasteur with similar allegations. In that case, plaintiffs said Sanofi sold meningococcal vaccine Menactra in bundles with other key pediatric vaccines to dissuade purchasers from buying Novartis’ Menveo. In 2017, Sanofi settled for $61.5 million.