Bristol-Myers to pay $670 million to settle antitrust suits; actions to block generic drugs criticized

Tuesday, January 7th 2003, 12:00 am

By: News On 6

NEW YORK (AP) _ Bristol-Myers Squibb agreed to pay $670 million to settle lawsuits stemming from tactics it used to keep generic versions of two of its best-selling drugs off the market.

In a statement Tuesday, the New York-based drug maker said it believed its actions were lawful but opted to settle the antitrust litigation to put the uncertainty of a legal battle behind it.

In December 2001, 29 states and Puerto Rico sued Bristol-Myers Squibb for allegedly using illegal tactics to keep a generic version of antianxiety drug BuSpar off the market. Last June, a different group of 29 states accused the company of illegally blocking a generic version of its cancer-fighting drug Taxol.

Numerous consumer groups, drug store chains and generic drug companies are also suing the company and are included in the settlement.

Under the agreement, Bristol-Myers will pay $535 million to resolve claims over BuSpar and $135 million to settle Taxol-related claims. The announcement did not specify whether individual consumers would be reimbursed.

Details of the deal are still being finalized. Among the provisions remaining to be negotiated are the terms for incorporating certain claimants, including health insurers, into the framework.

Bristol-Myers had angered consumer advocates for listing additional patents on BuSpar the day before generics were poised to enter the market in late 2000.

Drug companies' use of loopholes in the patent laws to maintain their monopolies pushed the Senate last year to pass legislation that would have revised the rules for bringing generic drugs to market. The bill never passed in the House but late last year President Bush proposed new regulations that resemble parts of the Senate bill.

Bristol-Myers has been especially hard hit by patent expirations _ but that is hardly its only problem. Sales incentives to wholesalers created a drug glut that will cut the company's 2002 earnings by nearly 50 percent from 2001 levels. The program sparked two government investigations and the company is preparing to restate its earnings for 2001 and 2002.

In addition, it has had to write off more than $1 billion on its investment in ImClone Systems after the Food and Drug Administration refused to accept the application for the biotech company's star cancer drug.