ATTORNEYS general in 15 states, DC, file antitrust suit over Cardizem pricing

Tuesday, May 15th 2001, 12:00 am
By: News On 6

DETROIT (AP) _ Attorneys general in the District of Columbia and 15 states, including Oklahoma, filed a federal lawsuit Monday alleging two pharmaceutical companies violated antitrust laws in conspiring to keep the generic form of heart medication Cardizem CD off the market.

The suit, filed in federal court in Detroit, claims that French-based Aventis SA, maker of Cardizem, paid Andrx Corp. $89 million to keep its less costly generic version off the market for 11 months starting in July 1998.

In that time, users of the drug _ which treats high blood pressure, chest pains and heart disease _ were paying about $73 a month for Cardizem when the generic Cartia XT would have cost about $32 a month.

``When there's a monopoly of a certain drug, prices go up and choice for the consumer goes down,'' Michigan Attorney General Jennifer Granholm said at a news conference Monday. ``Any average consumer on this drug probably paid an extra $400 a year as a result of this monopoly.''

A message left with an Aventis spokesman in Parsippany, N.J., was not immediately returned Monday.

Gale A. Blackburn, director of investor relations for Weston, Fla.-based Andrx, said the company would issue a statement on the case later Monday. ``We just received notice of it this morning,'' Blackburn said.

The lawsuit is the latest that has been filed in recent months over the generic drug pricing disputes. Last week, a coalition of consumer groups sued three drug companies in Brooklyn federal court, asserting a relationship between the companies has artificially inflated the cost of a generic form of breast cancer treatment drug tamoxifen.

Last month, the groups filed a lawsuit against Bristol-Myers Squibb Co. over a patent for its anti-anxiety drug BuSpar. Bristol-Myers had filed a new patent to block generic competition, but a judge ruled that the patent should not prevent such competition. However, for several months, consumers were deprived of the cheaper medicine, the suit alleges.

Both the Federal Trade Commission and the Justice Department have also been investigating the generic drug pricing issue.

Monday's lawsuit, which involves the attorneys general of New York, Arizona, California, Idaho, Indiana, Maine, Michigan, Minnesota, New Mexico, North Carolina, Oklahoma, Utah, Vermont, Washington state and West Virginia, seeks at least $100 million in damages.

Granholm said Aventis brought a lawsuit for patent and trademark infringement against the generic-drug producer in late 1995 or early 1996. But instead of asking Andrx to pay damages, Aventis offered a settlement to pay the Florida-based drug maker $89 million. In turn, Aventis made $700 million in the 11 months the generic drug was kept from consumers, Granholm said.

The Aventis-Andrx deal was canceled after negative criticism of the arrangement, the filing of private lawsuits and the beginning of an FTC investigation, Granholm said.

U.S. Court Judge Nancy Edmunds already has ruled that the agreement was a violation of antitrust law. The drug makers are appealing the ruling.

``We believe this lawsuit was a ruse in order to keep the generic drug off the market,'' Granholm said, adding that the attorneys general are seeking damages on behalf ``those who paid the inflated price.''

``The concern is that a company might view this (settlement practice) as a cost of doing business,'' Granholm said. ``We want to make sure that the profit is not worth it ... and hopefully, other companies will think twice before they engage in this type of agreement.''

About 1 million people nationwide use Cardizem or its generic version, according to New York Attorney General Eliot Spitzer.

Shares of Aventis were trading at $74.46, down $1.07, on the New York Stock Exchange. Shares of Andrx were down $2.52 to $54.20 on the Nasdaq Stock Market.