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California Joins 31 States in Antitrust Lawsuit Against Generic Drug Manufacturer Mylan

Alleged Monopolization and Price Fixing Cost Californians Millions of Dollars
Monday, February 8, 1999
Contact: (415) 703-5837

(SACRAMENTO) -- Attorney General Bill Lockyer today announced that California is joining 31 states in suing five companies for allegedly monopolizing the market and fixing the prices for two popular generic drugs used to treat tension, anxiety and insomnia.

The amended complaint, filed Monday in federal district court in Washington, D.C., alleges that the drug manufacturer Mylan Laboratories of America, Inc., of Pittsburg, Penn., and four other companies conspired to monopolize the market and fix prices for the generic drug lorazepam and generic clorazepate tablets.

The drug monopoly has cost Californians millions of dollars. The generic anti-anxiety drugs are used widely by private patients and Californians receiving care through Medi-Cal, state mental health programs and state prisons.

"The lawsuit goes after companies that tried to corner the market and fix prices -- action that had consumers paying as much as 3200 percent more for their anti-anxiety medication," Lockyer said. "These offenses hurt California consumers, including the elderly in nursing homes, who are undergoing long-term treatment and had little choice but to pay the astronomical price hikes."

Doctors issue more than 18 million prescriptions a year for lorazepam tablets and more than three million prescriptions a year of clorazepate tablets. Lorazepam is used to treat anxiety, tension, agitation, insomnia and is used as a pre-operative sedative. Clorazepate is used to treat anxiety and hypertension, and as part of therapy for nicotine and opiate withdrawal.

The lawsuit alleges that the companies beginning in August 1997 conspired and agreed to fix, raise or stabilize the price of the drugs in action that resulted in price hikes of up to 3200 percent. The original complaint filed Dec. 22, 1998, by 10 states and the Federal Trade Commission cites that in one instance a bottle of 500 clorazepate tablets increased from $11.36 to $377, while a bottle of 500 lorazepam tablets rose from $7.30 to $191.50.

The Federal Trade Commission has asked the companies to refund $120 million. The states' complaint also seeks unspecified monetary damages, penalties, attorney fees and injunctive relief.

Other defendants named in the lawsuit are Cambrex Corp. of East Rutherford, N.J., Profarmaco SRL of Milan, Italy, Gyma Laboratories of America Inc. of Westbury, N.Y., and SST Corporation of Clifton, N.J.

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