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About K-Dur 20
K-Dur 20, manufactured by Schering-Plough Corporation (Schering-Plough), is a prescription potassium chloride supplement used to treat patients with low blood potassium levels, a condition that most commonly occurs in people taking certain drugs to treat high blood pressure. Low potassium levels in the body can cause dangerous cardiac problems, and patients who have low potassium levels have no practical substitute for potassium chloride supplements.
According to data compiled by the PRIME Institute, K-Dur 20 is the fourth most frequently prescribed drug to the elderly in the United States . Although there are several companies that manufacture potassium chloride supplements, Schering-Plough is the only manufacturer of 20 milliequivalent (MEQ), extended-release potassium chloride tablets and capsules. For clinical reasons, physicians and patients often prefer 20 MEQ extended-release potassium chloride tablets over other forms and dosages of potassium chloride.
On April 2, 2001, the Federal Trade Commission (FTC) charged Schering-Plough, Upsher-Smith Laboratories (Upsher-Smith) and American Home Products Corporation (AHP), with entering into anticompetitive agreements aimed at keeping low-cost generic forms of K-Dur 20 off of the market. The FTC alleged that Schering-Plough illegally paid Upsher-Smith and AHP millions of dollars to induce those two companies to delay launching their generic versions of K-Dur 20. According to the FTC, these illegal agreements cost consumers more than $100 million.
The FTC's complaint alleged that when Upsher-Smith and ESI Lederle, Inc. (a division of AHP) sought FDA approval to manufacture and distribute a generic form of K-Dur 20, Schering-Plough sued each company for patent infringement. According to the FTC complaint, Schering-Plough then settled both lawsuits through agreements calling for multi-million dollar payments to Upsher-Smith and AHP in exchange for the generic companies' commitment to stay out of the K-Dur 20 market for specified time periods. As a result of these agreements, no other generic company has been able to bring a generic version of K-Dur 20 onto the market.
The first generic version of a brand name drug to hit the market usually costs 30 to 40 percent less than the brand name drug. Then, as more generic versions become available, prices generally drop by as much as 70 to 80 percent of the brand name price. As a result of these lower prices, brand name manufacturers generally lose as much as two-thirds of their market share to lower priced generic versions within the two years. Schering-Plough estimated that the first year of low-priced generic competition would decrease branded K-Dur 20 sales by over $30 million.
PAL Member Litigation
In June 2001, members of Prescription Access Litigation (PAL) filed class action lawsuits in both state and federal court alleging that the three pharmaceutical companies illegally conspired to monopolize the market for potassium chloride supplements, forcing consumers to pay artificially inflated prices for this important medication. The lawsuits are on behalf of consumers who have purchased K-Dur 20 in those states and on behalf of consumer organizations whose members have purchased K-Dur 20. Specifically, PAL's lawsuits allege that the three companies have:
- Allocated the entire market for 20 milliequivalent, extended-release potassium chloride supplements to Schering-Plough, with a portion of Schering-Plough's monopoly profits being allocated to Upsher-Smith and American Home Products in exchange for their agreement not to compete with Schering-Plough; and
- Forced consumers who purchase K-Dur 20 to pay artificially inflated prices because they have been deprived of the benefits of free and open competition in this market. The prices consumers currently pay for K-Dur 20 are substantially greater than the prices consumers would pay absent these illegal agreements.
PAL's lawsuits sought: Fair and adequate compensation for persons who have been overcharged by the illegal business practices concerning K-Dur 20;
An end to the illegal agreements between Schering-Plough and the two other companies. Until the agreements are ended, consumers who purchase K-Dur 20 will continue to be deprived of a lower-cost generic equivalent to K-Dur 20.
PAL's K-Dur 20 cases were consolidated with other cases from around the country in the U.S. District Court in New Jersey before Judge Greenaway.
In February 2004, Judge Greenaway approved consolidation of several K-Dur 20 cases. The plaintiffs filed an amended consolidated complaint on November 1, 2004, and a motion for class certification on November 30, 2004.
Update: On August 16, 2007, the plaintiffs and one of the defendants, Wyeth, submitted a proposed settlement to the Special Master that the Court had assigned to the case. On October 10, 2007, The Special Master decided not to consider whether to grant "preliminary approval" to this settlement until he had received all the briefs related to the plaintiffs' Motion for Class Certification. On March 27, 2008, the Special Master issued two orders, refusing to grant preliminary approval to the proposed settlement with Wyeth and denying the plaintiffs' motion for class certification. The plaintiffs decided in light of these rulings to voluntarily dismiss the case.
Court: U.S. District Court, District of New Jersey (Judge Greenaway)
K-Dur 20 Plaintiff Class
Members of the proposed K-Dur 20 lawsuit class included individuals who have paid out-of-pocket costs for K-Dur 20 since June 18, 1997.
Related Documents & Resources
Nationwide Coalition of Consumer Groups Welcomes AARP to Class-Action Pharmaceutical Litigation
Consumer Groups Sue Three Drug Companies For Blocking Generic Version of Widely Used Potassium Supplement