Schumer Accuses Merck of Undercutting Generic Equivalent to Zocor

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The New York Sun

WASHINGTON – A New York senator accused the drug giant Merck & Co. yesterday of conspiring to undercut a cheaper generic alternative to its cholesterol-lowering drug Zocor just days before it becomes available to patients.

Senator Schumer, a Democrat, charged that Merck is quietly collaborating with health insurance companies to create lower copays for customers buying Zocor than for those buying the generic equivalent.

Zocor generated $4.4 billion in sales last year, and generic alternatives will be available for the first time on Friday. A company executive scoffed at Mr. Schumer’s allegations.

“It appears that Senator Schumer is criticizing us because he says that our prices are too low. That’s a new one,” the vice president for public policy for Merck, Ian Spatz, said.”The truth is that we support generic competition and the generic competition for Zocor is good for patients. It’s good for people who have to pay for medicine, which include health plans. We’re going to continue to price it competitively,” he said.

Typically, generics offer customers a steep discount on the cost of the original drug, but Mr. Schumer is complaining that Zocor is trying to turn that market upside-down by encouraging an insurance copay system in which Zocor would have a significantly lower copay than the generic version.

Mr. Schumer charged the company had already struck one such agreement with a health insurance company, and asked the Federal Trade Commission to investigate.

“I find this practice highly disturbing and anticompetitive,” Mr. Schumer wrote the agency. “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 anticompetitive behaviors expeditiously.”

An FTC spokeswoman did not immediately return a reporter’s call for comment.

A company about to launch the generic version of Zocor, Teva Pharmaceuticals USA, may see lower-than-expected sales from Merck’s move.

Teva CEO William Marth said the company wants fair marketplace competition and “we support Senator Schumer’s call for more transparency.”

The New York Sun

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