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Price Fixing Costs Drug Co. $147M

July 13, 2000

PITTSBURGH (AP) _ A drug company has agreed to pay $147 million to settle lawsuits by states and the federal government that it unfairly dominated the market for two tranquilizers used mostly by the elderly.

Mylan Laboratories Inc. of Pittsburgh was accused 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, according to lawsuits filed by the federal government, 32 states, the District of Columbia and patients.

Pennsylvania Attorney General Mike Fisher said 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.

``This kind of behavior is unconscionable and caused nursing home and hospice patients who frequently use the drugs to suffer from astronomical price hikes,″ California Attorney General Bill Lockyer said.

Minnesota Attorney General Mike Hatch said officials have not determined how many people will be reimbursed.

``If you’re a senior citizen living in a hospice, you don’t have a lot of choices,″ he said. ``This was the medication they needed and in many cases, it was the medication they couldn’t afford.″

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, Mylan spokeswoman Pat Sunseri said.

Under Wednesday’s 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, Sunseri said.

The agreement must still be approved by the FTC and a federal judge in Washington.


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