Abbott Labs Pays $22.5 Million to Settle Allegations it Blocked Generic Drug Competition
From Canadian Press DataFile (January 7, 2010)
WASHINGTON _ Drugmaker Abbott Laboratories has agreed to pay $22.5 million to settle allegations that it tried to block generic competition to a popular cholesterol medication, according to state officials.
The agreement was announced Thursday by attorneys general from 22 states and the District of Columbia, who sued Abbott to recover costs to state Medicaid plans.
The multistate lawsuit alleged that Abbott and a unit of Belgium drugmaker Solvay Pharmaceuticals made minor changes to the formulation of TriCor to prevent cheaper generic versions from being marketed.
``These companies deprived taxpayers, state agencies, and consumers of a fair marketplace that would have lowered prices by offering less expensive generics,'' said New York Attorney General Andrew Cuomo, in a statement.
New York is slated to receive $4.5 million from the settlement, the largest allocation of any state.
Generic drugs can cost between 30 to 80 per cent less than brand-name medications. Generic drugmakers try to win the rights to market cheaper versions by challenging the patents on branded medications.
A spokesman for Abbott says the company believes it acted lawfully.
``We agreed to settle the lawsuits to avoid the uncertainty of ongoing litigation,'' said spokesman Scott Stoffel.
North Chicago-based Abbott agreed last year to acquire Solvay for more than $6 billion. The deal is expected to close in the first quarter of this year. Abbott licenses the U.S. rights for Trilipix and TriCor from Brussels-based Solvay. The drugs are used to raise ``good'' HDL cholesterol while reducing triglycerides and ``bad'' LDL cholesterol.
Other states due to receive settlement payments include Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Maine, Maryland, Minnesota, Missouri, Nevada, New York, Oregon, Pennsylvania, South Carolina, Washington, and West Virginia.
Posted: January 2010