June 22, 2006

A prominent U.S. senator has asked the FTC to launch an antitrust investigation into whether Merck is offering rebates to major health insurers that agree to adjust drug copays so it will be cheaper to buy Merck's cholesterol drug Zocor than the generic equivalent.

The patent on Merck's $4.4 billion drug Zocor (simvastatin) expires on June 23, when Teva Pharmaceutical plans to launch its generic equivalent.

"Time is of the essence given the imminence of the generic drug's entrance into the market, and I urge you to begin an investigation of these anti-competitive behaviors expeditiously," Sen. Charles Schumer (D-N.Y.) said in a letter to FTC Chairwoman Deborah Platt Majoras, according to a statement posted on Schumer's website June 21.

Schumer also said that he would introduce legislation to prohibit these deals if necessary. Merck has already forged an agreement with insurer United Health Group, according to Schumer. Merck did not respond to a request for comment.

The senator likened the rebates to launching authorized generics and predicted the deals would last only 180 days, "intentionally designed to interfere with the 180-day exclusivity period that the first generic [drugmaker] on the market relies on to recoup the cost of ensuring timely patent challenges and market entry."

In a June 21 statement, the Generic Pharmaceutical Association (GPhA) said it "cannot comment on the appropriateness of individual business arrangements between pharmaceutical manufacturers and their customers," but that it is "committed to ensuring the integrity of the 180-day exclusivity period." GPhA said the incentive "provides market exclusivity to generic companies that have accelerated consumer access to affordable medicines." (http://www.fdanews.com/did/5_122/)