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Executive Summary

INDOMETHACIN TRADE DRESS SUIT: MERCK STUDY OF SUBSTITUTION RATES shows that "changes in [generic] product appearance [from brandname products] do not entirely eliminate generic companies from the market, but severely impede their ability to compete," Par stated in a recent brief filed with the U.S. Third Circuit Court of Appeals. Par said Merck's review of 61 products for which there were substitutes "showed a significantly reducedsubstitution rate for products that looked distinct from the brandname version." Merck found "non-distinctive substitutes enjoyed on average, a substitution rate approximately 40% higher" than generics that were distinctly different from the branded product. Par asserted that the premise of Merck's study is "exactly what Par and other generic companies have consistently claimed -- 'that patients would be upset if an unfamiliar pill was substituted for a familiar one.' This premise alone constitutes a direct admission by Merck contrary to its current litigation position that color, size and shape are non-functional." Par is appealing a permanent injunction issued by the U.S. District Court of New Jersey September 25, 1984, which bars Par from selling or distributing indomethacin capsules similar in color, size and shape to Merck's Indocin. Merck filed suit against Par in April 1984, alleging the generic mfr. was engaged in unfair competition under the Lanham Act. Bolar recently petitioned the Supreme Court to make a final decision on the lookalike issue through a review of a Third Circuit decision that use of Ciba-Geigy's Apresazide colors for generic hydralazine/hydrochlorothiazide is unfair competition under the Lanham Act and state law. Bolar maintained that Supreme Court review of the case is necessary to resolve conflicting rulings by the lower courts.

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