(SACRAMENTO) – Attorney General Bill Lockyer today announced an $80 million settlement of a multi-state antitrust lawsuit that alleged two major drug makers – Aventis Pharmaceuticals Inc. and Andrx Corporation – conspired to keep a popular generic heart medication off the market.
The $80 million will provide reimbursement for individual consumers, health plans, government-sponsored programs and other governmental entities. The settlement resolves suits brought by all 50 states, the District of Columbia, Puerto Rico and private plaintiffs.
"Elderly Californians on fixed incomes paid millions of dollars more a year for heart medication because these companies unlawfully prevented them from buying a less expensive drug," said Lockyer. "This settlement ensures some of the companies' illegal profits go back to the consumers and taxpayer-funded programs forced to pay higher prices."
The lawsuit alleged Hoechst, a pharmaceutical firm bought by Aventis in 2000, paid Andrx a total of $89 million to keep from consumers Andrx's generic version of Cardizem CD, a Hoechst-made heart drug used to treat hypertension. The generic medication cost less than the $65 price for a monthly dosage of Cardizem CD. Cardizem CD accounted for more than $700 million in sales for Hoechst.
Of the $80 million total settlement payment, an estimated $21 million nationwide will provide compensation for individual consumers. Another $4.5 million will reimburse state-government agencies that made payments for the more expensive heart drug. After subtracting attorney fees and litigation costs, expenses for administering the restitution, and other costs, the balance of the $80 million will be distributed to health plans and other third parties that helped consumers pay for the higher-priced medication.
Individual consumers' reimbursement will depend on several factors, including how much Cardizem CD they bought. Consumers who paid cash in 1998-99 for Cardizem CD without any health insurance or other prescription drug coverage will receive the highest level of compensation. Such consumers who paid cash for Cardizem CD starting in 2000 will receive a lesser level of reimbursement, as will consumers covered by insurance or other prescription drug payment plans who paid for Cardizem starting in 1998.
The settlement agreement specifies total attorney fees and expenses cannot exceed $18.1 million; $15.6 million maximum for private plaintiffs counsel and $2.5 million for state Attorneys General.
Andrx received the U.S. Food and Drug Administration's preliminary approval for Cartia XT, a generic version of Cardizem CD. The FDA's action would have allowed Andrx to start marketing Cartia XT on July 8, 1998. But on Sept. 24, 1997, Andrx signed an agreement with Hoechst under which Hoechst paid Andrx millions of dollars each quarter to keep Cartia XT off the market, and to not sell any other drug that was the equivalent of Cardizem CD.
"These actions deprived Plaintiff states and their consumers of a free and fair market for pharmaceutical products, were detrimental to the health of those citizens who could not afford to pay the higher prices charged by (Hoechst), and resulted in higher costs to government and other payers of health care expenses," the states alleged in their complaint.