Bristol-Meyers settles charges it blocked sale of generic

Saturday, March 8, 2003

WASHINGTON -- Pharmaceutical giant Bristol-Myers Squibb Co. on Friday settled federal charges that it blocked the sale of cheaper generic versions of three of its drugs, allegedly costing cancer patients and others hundreds of millions of dollars.

The Federal Trade Commission said the company tried to limit competition for two of its anticancer drugs -- Taxol and Platinol -- and the antianxiety drug BuSpar. The company's actions protected nearly $2 billion in annual sales, according to the FTC.

"Through Bristol's decade-long pattern of alleged anticompetitive acts, Bristol avoided competition by abusing federal regulations," said Joe Simons, director of the FTC's Bureau of Competition.

He said the company deceived the Patent and Trademark Office to obtain patent protection and paid a rival company $72.5 million to not bring generic drugs to market.

"Cancer patients and other consumers, who -- being denied access to lower-cost alternatives -- were forced to overpay by hundreds of millions of dollars for important and often lifesaving medications," the FTC said in announcing the settlement.

Bristol agreed it would no longer list patents on a drug after a generic firm indicated it would market its own version.

No FTCfines

The FTC did not impose any fine. The agency decided financial penalties and consumer payments would be negotiated by states that have sued Bristol, said Susan Creighton, deputy director with the FTC's competition bureau.

"It was a natural division of labor," she said.

On Friday, Bristol formalized a $535 million settlement announced in January with 29 states and Puerto Rico to end lawsuits involving its efforts to block a generic version of BuSpar. The agreement was filed in U.S. District Court in New York City.

Taxol is used to treat ovarian, breast and lung cancers and cancer related to AIDS. Platinol and Platinol-AQ are different versions of the same brand-name drug used for the treatment of various cancers. BuSpar is used to manage anxiety disorders.

Simons said the settlement would prevent Bristol-Myers from engaging in unlawful behavior that keeps competitive generic products off the market.

New York-based Bristol-Myers said in a statement that it agreed to the settlement "to achieve a resolution of these matters which will allow it to continue its focus on discovering and developing quality medicines."

Bristol-Myers shares, which have fallen in the past year, rose 27 cents a share to close Friday at $22.80 on the New York Stock Exchange.

For a firm to market a generic drug while another company has an active patent on a brand-name version, the generic firm must challenge the patent with the Food and Drug Administration.

If the company with the brand-name drug sues for patent infringement, FDA approval for the generic drug automatically is suspended for 30 months.

The FTC said Bristol abused this process by listing patents that were invalid or unrelated to the approved drug. Bristol made these filings after generic companies had challenged its patents, causing automatic delays that pushed back the availability of cheaper generics.

In 1994, Bristol paid Schein Pharmaceuticals $72.5 million to settle a challenge to a Bristol patent on BuSpar, the FTC said. Schein has since been acquired by Corona, Calif.-based Watson Pharmaceuticals Inc., which settled its own antitrust lawsuit against Bristol last year.

As for the settlement with states, Richard L. Schwartz, a New York assistant attorney general, said states will receive between $93 million and $100 million to reimburse consumers and health programs such as Medicaid.

The remainder of the settlement money -- more than $400 million -- will go to others who purchased the drugs, such as insurance companies, retail pharmacies and pharmacy benefit managers.

A $135 million settlement for Taxol-related claims by the states, also announced in January, has not yet been filed in court.


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