K-Dur Antitrust Litigation

Class Representatives' Claims

Plaintiff's action arises out of alleged agreements to restrain trade which Schering entered into with Upsher and Wyeth (the "Agreements"). Plaintiff alleges that Schering entered into an agreement with Wyeth in or about January 1998, settling patent infringement litigation filed by Schering against Wyeth in the United States District Court for the Eastern District of Pennsylvania. Plaintiff alleges that, pursuant to this settlement, Schering agreed to pay Wyeth $30 million in return for Wyeth's agreement to drop its patent challenge and delay marketing its generic version of K-Dur 20 for approximately seven years.1 Plaintiff has alleged that the agreements between (a) Schering and Upsher, and (b) Schering and Wyeth, were unreasonable restraints of trade in violation of the federal antitrust laws, which had the purpose and effect of delaying the entry of generic versions of K-Dur 20 into the market. Plaintiff has alleged that the actions taken by Defendants, which allegedly delayed the entry of less expensive generic versions of K-Dur 20, have harmed Plaintiff and other direct purchasers by causing them to pay higher prices for 20 milliequivalent extended-release potassium chloride tablets.

Wyeth's Denial of Liability

Wyeth and the other Defendants vigorously dispute Plaintiff's claims that the Agreements were illegal. Wyeth argues that, under the settlement of the patent infringement litigation between Schering and Wyeth, which concerned Schering's patent related to a potassium chloride supplement called K-Dur 20, Schering and Wyeth agreed that a generic version of K-Dur made by ESI Lederle, Inc. (a former subsidiary of Wyeth), could be marketed beginning January 1, 2004 (thirty-two months before expiration of Schering's K-Dur patent), Wyeth agreed to license Schering the rights to certain of Wyeth's products, Schering agreed to pay Wyeth up to $30 million, and Schering and Wyeth agreed that the patent litigation would be dismissed. Wyeth also denies Plaintiff's claims that its agreement with Schering caused Plaintiff and members of the Class any harm. Wyeth asserts, among other defenses, that its agreement was pro-competitive, legal, and that in any event, the agreement did not cause any injury to direct purchasers because it did not delay any cheaper generic 20 milliequivalent extended-release potassium chloride tablets from entering the market.

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