Pharma Companies in Court
May 19, 2015
By Andrew Hoglund

In the news this past week there were several large pharmaceutical companies that either resolved some of their legal troubles or are on the verge of resolving their legal troubles. Merck had some overseas trouble it is taking care of while Actavis and Johnson & Johnson have marketing issues they are attempting to solve.

Merck has been battling Glenmark Pharmaceuticals over copycat drugs the Indian pharma company created over two years ago. Glenmark made generic versions of Merck’s Januvia and Janumet diabetes drugs, and Merck accused Glenmark of releasing these generics prematurely. Glenmark had released the drugs at a 20% discount of Merck’s drugs, and they quickly became the top selling diabetes drugs in India. Glenmark won an initial battle when the Indian Supreme Court told the company it could continue to sell its knockoffs despite the impending suit. However, India’s Supreme Court has now officially blocked the generics company from marketing its cheap versions of the drugs in the country. Glenmark is allowed to continue to sell its existing inventory but future sales of its Januvia and Janumet generics in India are strictly forbidden.

Actavis completed its buyout of Ireland’s Warner Chilcott over a year ago; however it is still dealing with some potential legal issues the Irish company brought upon itself before the sale took place. Warner Chilcott is being probed by the Department of Justice for breaking marketing and sales rules. One of the issues that are being investigated is “payments to people who are in a position to recommend drugs.” The suit claims that the drugmaker hired young and inexperienced sales reps who didn’t know the rules for marketing and sales, thus they didn’t know any better when Warner Chilcott had them break the rules. Actavis has been meeting with the DOJ in order to see if there is any way to put an end to the investigations.

Johnson & Johnson is near the end of resolving its marketing troubles regarding Risperdal. J&J was accused of misleading doctors and patients about the benefits and risks of the drug. J&J was ordered to pay $327 million in South Carolina, $158 million in Texas, and $1.2 billion in Arkansas back in 2012. The $327 million payment in South Carolina has now been reduced to $136 million. In March 2014, Arkansas’s Supreme Court threw out the judgment, stating that the suit was filed under a law that doesn’t apply to pharma companies, only healthcare facilities. Now, after another year of court battles, J&J is being ordered to pay only $7.5 million in Arkansas.

This past week Merck was able to solve its legal issues in India with a generic drug maker that was encroaching on its drugs, giving hope to other Western drugmakers that they won’t lose out on a strong market. Actavis is hoping to solve its issue with the Depart of Justice, although they have not come to a conclusion yet. And Johnson & Johnson is getting off light with a $7.5 million payment considering the initial payment was $1.2 billion. It will be interesting to see how the pharma market reacts moving forward with these stories.