In re K-Dur Antitrust Lawsuit: Class Claims Anticompetitive and Artificially High Prices
Berger Montague served as Co-Lead counsel for a class of direct purchasers of the brand-name drug K-Dur 20, a potassium chloride supplement used to treat patients with depleted potassium. The class alleged that Schering-Plough, Upsher-Smith, and American Home Products violated federal antitrust law by entering into written, anticompetitive agreements under which Schering-Plough paid its rival generic manufacturers, Upsher-Smith and American Home Products, $60 million to delay the market entry of their generic versions of K-Dur 20. The class claimed that, as a result of these anticompetitive agreements, purchasers of K-Dur 20 were forced to pay artificially high prices for the drug entity sold as K-Dur 20.
One defendant, American Home Products, agreed to settle for $2.1 million.
About the case
After the district court dismissed the case at summary judgment, Berger Montague won a key victory when the Third Circuit revived the case in July 2012, ruling that “pay for delay” deals should be evaluated under a “quick look” standard. In “pay for delay” agreements, a brand drug company – facing the prospect of competition from a generic rival offering a less expensive, yet identical version of the drug – pays the generic company to delay its market entry, typically in connection with settlement of patent litigation between the two companies. Government studies have shown that pay-for-delay deals cost the government and the buying public billions of dollars a year. Defendants in the case were Schering-Plough (now Merck), the brand company, and Upsher-Smith, the generic.
In the same ruling, the Third Circuit also upheld certification of the direct purchaser class, rejecting arguments that the class had internal conflicts and finding that plaintiffs’ proof of the price-lowering effects of generic entry could be predominantly common to members of the class. In re K Dur Antitrust Litig., 686 F.3d 197 (3d Cir. 2012). The case was later vacated after the Supreme Court’s decision in FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013), which held that antitrust “rule of reason” standard applied. On remand, however, the Third Circuit reinstated its ruling upholding class certification. In re K-Dur Antitrust Litig., 2013 WL 5180857 (3d Cir. Sept. 9, 2013).
Click here to download and read the First Amended Class Action Complaint (PDF)
On May 15, 2017, defendants Merck & Co. Inc. and Upsher-Smith Laboratories Inc. agreed to pay a $60.2 million settlement. U.S. District Judge Stanley R. Chesler granted preliminary approval of the settlement on May 23, 2017. The settlement received final approval on October 5, 2017.
American Home Products, another defendant, had previously settled for $2.1 million.