Lawmaker: Merck scheming to undercut Zocor generic
“It appears that Sen. Schumer is criticizing us because he says that our prices are too low. That’s a new one,” said Ian Spatz, Merck’s vice president for public policy.
Well, no, that’s not why Sen. Schumer is criticizing the deal between Merck and UnitedHealth Group, which places branded Zocor in Tier 1 (lowest) co-pay and Teva’s impending generic simvastatin in Tier 3 (highest). And it’s not why he has called for an FTC investigation of the deal. He is criticizing the deal, as any reasonable person will understand, because Sen. Schumer suspects that UnitedHealth and Merck have entered into an arrangement that gives Zocor a favored co-pay status in exchange for something besides just a really good price on Zocor. He is concerned that a deal that favors an innovator over a generic on anything other than a level-playing-field basis will do great damage to the incentives for generic manufacturers to be the first to bring a new generic to market.
If Merck has simply entered into a one-off agreement with an insurer, under which they are offering Zocor at a genuine discount to the generic, then more power to them. I think it’s a tactic worthy of a trial that should benefit consumers and that perhaps will help Merck hold on to some profits that it would otherwise lose. But I also think a call for an investigation of the deal is not an alarmist response and is probably needed any time such a deal is made in order to allay understandable concerns of possible anti-competitive behavior.
