Merck's Mumps Vaccine Controversy: Class-Action Lawsuit Alleges Anticompetitive Behavior, Court Shields From Liability

In the late 1990s, the FDA expressed concerns regarding the diminishing potency of Merck & Co., Inc.’s MRK mumps vaccine as it neared its shelf life.

To address these issues, Merck increased the vaccine’s initial potency; however, this adjustment failed to resolve the underlying problem.

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Rather than informing the FDA of this ineffective fix, Merck allegedly concealed the potency issues. The company ran a flawed clinical trial and utilized unreliable data to secure FDA approval for a less potent vaccine.

In response, a group of healthcare professionals and organizations filed a class-action lawsuit against Merck, alleging that they had been overcharged for the vaccine.

They claimed that Merck engaged in anti-competitive behavior by making misleading statements on the vaccine’s labeling, thereby extending its monopoly and violating the Sherman Act.

The lawsuit accused Merck of falsely representing the vaccine’s potency to deter potential competition from GSK Plc GSK.

“The record contains troubling evidence that Merck sought to extend its apparent monopoly by misrepresenting facts about its mumps vaccines on the FDA-approved drug labeling,” the lawsuit noted. “But those allegedly false claims were the result of Merck’s genuine and successful petitioning of the FDA.”

Merck sought summary judgment, asserting that its actions fell under the Noerr-Pennington doctrine, which protects companies from antitrust claims when their conduct is tied to legitimate government petitioning, such as seeking FDA approval.

Despite acknowledging Merck’s ethical issues, the District Court denied its motion, citing evidence that the company misrepresented facts regarding the vaccine’s potency.

The case was appealed, and while the appellate court recognized Merck’s questionable ethics, it ultimately upheld the Noerr-Pennington immunity, concluding that Merck’s actions were legitimate attempts to obtain regulatory approval.

This ruling emphasized the distinction between government actions and private conduct, suggesting that any injury to competition stemmed from FDA decisions rather than Merck’s actions alone.

Moreover, GSK also faced scrutiny in this context.

It was alleged that Merck’s tactics successfully delayed GSK’s entry into the U.S. market by more than a decade, raising the bar for GSK to meet regulatory standards.

Despite the claims of anti-competitive behavior, the immunity granted under the Noerr-Pennington doctrine shields Merck from liability, as its actions were deemed to have been aimed at securing government approval, not harming competition directly.

Price Action: MRK stock is down 0.29% at $108.28 at last check Tuesday.

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Photo Courtesy of Merck