United HealthCare Services, Inc. v. Merck & Co., Inc.

Background

United HealthCare Services, Inc. (UHS) brought an antitrust action involving Merck’s lipid-lowering drugs Zetia and Vytorin. UHS alleged that Merck and Glenmark Pharmaceuticals entered into an unlawful “reverse payment” agreement. According to UHS, the agreement delayed Glenmark’s launch of generic Zetia and included Merck’s promise not to launch an authorized generic during Glenmark’s period of first-filer exclusivity. UHS alleged that the agreement allowed higher prices for Zetia and Vytorin and caused UHS to pay overcharges for products prescribed to its insureds.

UHS asserted claims under the federal Sherman and Clayton Acts, Minnesota antitrust law, other states’ antitrust and consumer-protection laws, and unjust-enrichment law. After the case returned from consolidated pretrial proceedings, defendants moved to dismiss parts of the amended complaint. They argued that UHS lacked antitrust standing for its Vytorin-related claims, that UHS had agreed to be bound by the dismissal of certain claims based on an automatic antitrust-violation theory, and that the non-Minnesota state-law claims were not plausibly pleaded. Defendants did not seek dismissal of UHS’s primary theory concerning Zetia sales. UHS conceded that the claims based on the automatic-violation theory had been dismissed under a stipulation, so the court did not address that issue.

Court’s analysis

A motion to dismiss for failure to state a claim tests whether the complaint alleges enough facts to make relief plausible. The court accepted well-pleaded factual allegations as true but did not accept bare legal conclusions.

The court denied dismissal of the Vytorin-related claims based on lack of antitrust standing. Antitrust standing requires a private plaintiff to allege an injury of the type the antitrust laws seek to prevent and a sufficient connection between the alleged violation and the injury. The defendants identified uncertainties about UHS’s coverage policies, whether patients would switch from Vytorin to a generic two-pill regimen, and whether doctors would prescribe that regimen. The court nevertheless concluded that UHS had plausibly alleged that the defendants’ conduct was intended to, and did, cause UHS to pay artificially inflated prices for Vytorin. The court noted that it could reconsider the issue at summary judgment.

The court dismissed the non-Minnesota state-law claims in Count Five. UHS had listed the laws of 30 states without explaining the differences among those laws or why those laws provided relief for the alleged antitrust conduct. The court found that this bare and conclusory pleading did not satisfy the plausibility standard.

Disposition

Judge David S. Doty ordered that defendants’ motion to dismiss was granted in part and denied in part. The ruling denied dismissal of the Vytorin-related claims on the standing ground presented and dismissed the non-Minnesota state-law claims. The order did not address the claims that UHS conceded had already been dismissed under the earlier stipulation.