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Mylan To Pay To Settle Allegations

July 12, 2000

PITTSBURGH (AP) _ Mylan Laboratories Inc. will pay up to $147 million to settle allegations that it unfairly dominated the market for two tranquilizers widely used by senior citizens.

The federal government, 32 states, the District of Columbia and patients accused Mylan in the 1998 lawsuits of cutting off competition by reaching an exclusive deal with a key supplier, Profarmaco of Milan, Italy. Other suppliers could not produce adequate quantities of the drug, the lawsuits said.

Pennsylvania Attorney General Mike Fisher said that Mylan increased the price of clorazepate 3,000 percent in January 1998 and lorazepam by 2,500 percent two months later.

For clorazepate, the generic equivalent of Tranxene, that meant the price of 1,000 tablets went from $22.72 to $754, Fisher said. For lorazepam, the generic equivalent of the Ativan brand-name drug, the price of 1,000 tablets went from $13.60 to $378.

``These drugs are most frequently prescribed for nursing home and hospice patients. That’s what makes this behavior so appalling,″ Fisher said. ``Lorazepam, for example, is an anti-anxiety medication prescribed to those suffering from long-term debilitating conditions, such as Alzheimer’s disease.″

Under the agreement, the Federal Trade Commission and the states would get $100 million and up to $8 million for attorneys’ fees. Private plaintiffs who filed suit after the FTC and states will receive $34 million and up to $5 million for attorneys fees, Mylan spokeswoman Pat Sunseri said.

Company chairman and CEO Mike Puskar said allegations of price-fixing were ``absolutely untrue.″ The company agreed to the settlement to end legal expenses and because a loss on any of the complaints would have made the others harder to defend, Sunseri said.

The company did not agree to change any of its business practices under the settlement, she said. Mylan’s stock ended regular trading Wednesday at $18.875, down 12.5 cents, or 0.7 percent, on the New York Stock Exchange.

The agreement must still be approved by the FTC and U.S. District Judge Thomas Hogan in Washington, D.C.

``We think it’s a very solid settlement and the states will be discussing the allocation of these dollars,″ Ohio Attorney General Betty Montgomery said.

She said the breakdown will probably be based on the estimated number of victims in each state.

Arkansas Attorney General Mark Pryor said he did not expect money to be returned to people who had purchased the drugs. He said money from the deal might be spent on Alzheimer’s or prescription drug programs.

There are ``so many of them, but hopefully we’ll be able to benefit them in a general way,″ Pryor said.

Other defendants in the suit were East Rutherford, N.J.-based Cambrix Corporation, Italian company Profarmaco and New York-based Gyma, but Mylan will pay the entire settlement, the company said. Puskar said all of the defendants deny any wrongdoing.

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