Drug companies to pay $80 million for allegedly blocking cheaper generics

Posted: Tuesday, January 28, 2003

ALBANY, N.Y. -- Two drug companies have agreed to pay $80 million to settle allegations they conspired to keep a cheaper, generic version of a blood pressure medication off the market.

Under the settlement announced Monday, Aventis Pharmaceuticals Inc. and Andrx Corp. will pay the amount to states, insurance companies and consumers nationwide.

Consumers paid too much for the drugs Cardizem CD and its generic equivalents because the companies conspired to delay the marketing of cheaper competitors, said New York Attorney General Eliot Spitzer.

The average consumer will be eligible to recover 20 percent of what he or she spent on the drug over 14 months in 1998-99, or as much as several hundred dollars, said Spitzer, who handled the case with officials in 28 other states.

Spitzer said that in 1998, the German pharmaceutical giant Hoechst -- which was acquired by Aventis in 2000 -- paid Andrx just under $100 million not to market a generic form of Cardizem CD for 11 months. The agreement was to be renewed annually, he said.

This ''most craven form of anticompetitive behavior'' kept the drug financially out of reach for countless people, Spitzer said.

Spokespersons for the companies did not immediately respond to requests for comment. Under the settlement, they did not admit to any wrongdoing.

About $21 million of the settlement will go to consumers in every state, Puerto Rico and the District of Columbia; $30 million will go to insurance companies and other third-party payers; and $4.5 million will go to the states. The remainder -- more than $24 million -- will pay for administrative costs and legal fees.

''Today's settlement continues our mission to protect consumers by fighting prescription drug companies' efforts to manipulate the law to keep cheaper generic drugs of the market,'' Spitzer said.

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