Mutual Alleges Mucinex Monopoly In Extended-Release Guaifenesin
This article was originally published in The Tan Sheet
Executive Summary
Mutual Pharmaceutical alleges in an antitrust suit that RB attempts to monopolize the extended-release guaifenesin OTC category with its Mucinex product. The suit says Mutual has lost “tens of millions” due to RB's failure to honor a contract to supply an “authorized generic” of the product.
RB’s attempt to monopolize the extended-release guaifenesin OTC category thwarted Mutual PharmaceuticalCo. Inc.’splan to market an “authorized generic” of extended-release Mucinex, according to an antitrust complaint.
In a complaint filed in federal court Feb. 3, Mutual Pharmaceutical says RB has violated federal laws prohibiting anticompetitive business practices and seeks injunctive relief “to prevent [RB’s] illegal, monopolistic practices.” Philadelphia-based Mutual is joined in the complaint by other specialty pharmaceutical businesses also under the same ownership, URL Pharma Inc. and United Research Laboratories Inc.
The complaint swings on a 2007 settlement between Mutual and Adams Respiratory Therapeutics, which developed the Mucinex line before being purchased by RB the same year. After Mutual was first to file an abbreviated new drug application for a generic equivalent of Mucinex, Adams sued for patent infringement. Mutual agreed in a settlement not to enter the ERG market until another manufacturer launched a generic (Also see "Adams Reinforces Mucinex Patents In Settlement Agreement With Mutual" - Pink Sheet, 26 Mar, 2007.).
Additionally, Adams agreed in the settlement to supply Mutual with an ERG licensed as an authorized generic of the branded product. RB, formerly Reckitt Benckiser Group PLC, assumed all settlement rights and obligations of Adams when it acquired the company, according to the suit filed in U.S. District Court for the Eastern Pennsylvania District seeking a jury trial.
However, the complaint alleges Reckitt failed to hold up its end of the bargain after Perrigo Co. PLClaunched the first generic ERG in 2014.
According to Mutual, RB has “deliberately blocked the formation of a competitive generic market for the manufacture and sale of” extended-release guaifenesin “and has improperly preserved and extended RB's ability to extract monopoly profits from the consumer marketplace for ERG.”
Guaifenesin is the only OTC expectorant for thinning bronchial secretions. While a choice of immediate-release generics are available, RB charges a “monopoly price” for its extended-release products, according to Mutual. As of November 2014, RB was charging $11 for 200 400-mg tablets of the product and $64 for 524 600-mg tablets, the complaint says.
RB’s “conduct has imposed many millions of dollars of illegal monopoly charges on consumers,” argues Mutual, noting prices “would have been reduced or eliminated had Reckitt supplied Mutual with ERG product beginning in October 2013, as it was obligated to do” under the 2008 agreement.
Perrigo ERG History In Play?
RB declined to comment on the complaint, but the U.K. health, personal and household care product firm could be holding off on supplying Mutual due to Perrigo’s history with its ERG.
Dublin-based Perrigo stopped distributing its product shortly after a limited launch in 2012 because raw material sourcing did not meet manufacturing specifications. The firm’s ERG production stalled for more than two years until it resolved its supply problems and in October 2014 began distributing the product broadly (Also see "Perrigo Steps Up European Consumer Health Focus In Omega Pharma Deal" - Pink Sheet, 7 Nov, 2014.).
Perrigo endured its own battle with Reckitt, which accused the firm of violating its patents before a U.S. district court in 2012 granted Perrigo’s motion for summary judgment, but it also has tried to slow the launch of private label competition in the category (Also see "Perrigo Sets Generic Mucinex Launch After Patent Claim Decision" - Pink Sheet, 16 Jan, 2012.).
With the launch of Perrigo’s product, Mutual demanded RB supply it with a 600 mg generic ERG. RB “has refused to supply Mutual with ERG and, after having received the benefit of its bargain with Mutual for over 7 years, has now repudiated the settlement agreement,” according to the complaint.
The impact on RB from the launch of Perrigo’s product “was, as a result, modest, but under the 2007 settlement agreement the entry into the market of this generic product triggered Reckitt's obligation to supply ERG to Mutual.”
Mutual maintains RB’s decision not to honor the 2007 settlement is intended to “extend its monopoly position and to continue to extract monopoly profits from the consuming public.”
RB “has sought to eliminate, or substantially limit, generic competition with its branded ERG product,” and by repudiating its settlement and supply agreement with Mutual, RB stands only to pay damages of Mutual‘s lost profits on ERG products that would have been sold at generic prices, the complaint says.
In addition to being a “significant” disadvantage when it enters the generic ERG market because Perrigo already markets a 600-mg product, Mutual says it has not had the commercial advantage of selling a generic manufactured by Reckitt.
“Patients and physicians often prefer to purchase and/or prescribe generic tablets manufactured identically to the corresponding brand product. Only Reckitt can manufacture ERG that precisely matches the specification of the Mucinex product.”