August 31, 2001
Hit Pharmaceuticals
PBA Suits Charge Drug Price-Fixing
By William Van Auken
The Patrolmen's Benevolent Association filed Federal class-action
lawsuits in four separate states August 21, charging pharmaceutical
companies with violating anti-trust laws by conspiring to keep cheaper
generic drugs off the prescription market.
"These allegedly illegal agreements between brand-name and generic
companies force us, our members and others to pay high prices for
very important, common medications," said PBA President Patrick
J. Lynch. "Our union and our members have been squeezed by these
inflated prices, and we are bringing these lawsuits to fight back."
Funds Cover 46,000
As trustee for the two health and welfare funds that provide prescription
drug benefits for 46,000 active and retired city cops, Mr. Lynch
is the plaintiff in the suits.
The suits were filed simultaneously in Federal courts in Brooklyn,
West Virginia, Newark and Washington, D.C., jurisdictions where
nine brand-name and generic pharmaceutical companies named in the
suits have their headquarters.
Charges in the lawsuits are: Pfizer, Inc.; Mylan Laboratories,
Inc.; Barr Laboratories, Inc.; Zeneca, Inc.; Astrazeneca, PLC; Shering-Plough
Corporation; Upsher-Smith laboratories; American Home Products Corporation;
and Bristol-Myers Squibb Co.
The complaint filed in West Virginia accuses Pfizer, maker of Procardia
XL 30 - a brand-name drug used to treat hypertension and angina
- of making a deal with Mylan Labs, which had developed a generic
equivalent of the drug, that effectively preserved Pfizer's monopoly.
The agreement was the product of a 1997 lawsuit brought by Mylan,
one of the largest U.S. generic drug manufacturers, challenging
Pfizer's patent. Pfizer counter sued for patent infringement, resulting
in a settlement last year that allowed Mylan to market Pfizer's
drug, rather than its own. As a result, the police union charges,
there was no true generic competition and the PBA was compelled
to pay an artificially inflated price for the drug.
In the suit filed in Brooklyn Federal court, the PBA
accuses Zeneca and Astrazeneca, manufacturers of tamoxifen, the
most widely prescribed breast cancer drug, of entering into a similar
out-of-court settlement with the generic manufacturer, Barr Labs.
In return for the exclusive right to sell a Zeneca-manufactured
generic for only five percent less than the brand-name drug, Barr
dropped its successful challenge to Zeneca's patent. According to
the suit, a genuine generic would have been sold at 30 to 80 percent
less than the brand-name drug.
The lawsuit filed in Newark accuses Schering-Plough of forcing
inflated prices on PBA members and other consumers for the past
three years as the result of an allegedly illegal deal in which
it paid a division of American Home Products $80 million to keep
its generic versions of a popular medication for high blood pressure,
K-Dur20, off the market.
In Federal court in Washington, D.C. the PBA went after Bristol-Meyers
Squibb, accusing the pharmaceutical giant of filing false patent
information with the Food and Drug Administration in an attempt
to prevent competitors from marketing a generic alternative to BuSpar,
a commonly prescribed anti-anxiety drug.
"To file four suits in one day against some of the biggest drug
companies in the world is unprecedented," said Jeffrey J. Corrigan,
a former Federal prosecutor with the Justice Department's Anti-Trust
Division in New York City who is representing the PBA.
Acknowledging that this kind of lawsuit is associated more with
consumer advocates like Ralph Nader that the leader of a police
union, Mr. Corrigan said, "Cops serve the public good, and they
are serving the public good in this suit too."
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