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Merck Hit With 3rd-Party Payor Suit Over Vaccine Bundling


March 7, 2023

Merck Sharp & Dohme Corp. has been hit with another proposed class action over its allegedly anti-competitive practice of bundling several of its vaccines for children to maintain its monopoly power in the rotavirus vaccine market, this time brought by third-party payors who indirectly paid for or reimbursed rotavirus vaccines.

In the suit filed Friday, Baltimore’s mayor and City Council claim that Merck had already bundled several of its pediatric vaccines before GlaxoSmithKline PLC released its Rotarix vaccine. However, as it prepared for GSK’s introduction of the competing rotavirus vaccine, Merck added a condition to its contracts requiring customers to buy all or nearly all of their pediatric rotavirus vaccines from Merck. If they didn’t, customers would face substantial price penalties on all other bundled Merck vaccines, according to the complaint.

That allowed Merck to charge supracompetitive prices to purchasers of its vaccines, Baltimore said. And those prices are passed along to patients and third-party payors, such as the city and other putative class members, it said.

“Due to the Merck bundle, instead of significantly decreasing the price of RotaTeq when GSK entered the market, as would normally be expected to result from competitive entry into a monopoly market, Merck has maintained the price of RotaTeq at supracompetitive levels, actually increasing its list price despite facing competition from GSK,” the city said.

And as a result, the city and others have paid — and continue to pay — artificially inflated prices for the rotavirus vaccines, Baltimore added.

Baltimore said it’s suing on behalf of hundreds of thousands of third-party payors in so-called “repealer jurisdictions,” or states or districts that have repealed the bar on indirect purchaser plaintiffs seeking recovery. Those jurisdictions include California, Michigan, Nebraska, Oregon, New York and the District of Columbia, among others.

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Baltimore is represented by Eric L. Cramer, Russell D. Paul, David Langer and Daniel J. Walker of Berger Montague PC, Daniel H. Silverman, Leonardo Chingcuanco and Sharon K. Robertson of Cohen Milstein Sellers & Toll PLLC and Ebony Thompson and Jane Lewis of the City of Baltimore’s Department of Law.

Read the complete article on Law360.