GENERIC DRUGS: Price Fixing Alleged In ‘Novel’ Deal
A group of consumers in San Francisco has filed suit against German drug giant Hoechst AG, alleging that the company's $40 million annual payment to a generic drugmaker constitutes an antitrust violation. The Wall Street Journal reports that the history of the case began when Fort Lauderdale, FL-based Andrx Corp. announced in 1995 its intention to market a generic version of Hoechst's best-selling heart drug, Cardizem CD. In response, Hoechst, whose patents on the drug don't expire for up to ten years, sued the smaller company for patent infringement. The suit is still pending, but both drugmakers announced a deal last year in which Andrx agreed not to introduce the drug while the suit was pending in exchange for $10 million quarterly payments. The plaintiffs in the class-action lawsuit, Reliable Drug Center and consumer Betty Morris, both of Tustin, CA, call the arrangement "an 'outright bribe' and an 'unconscionable and per se illegal restraint of trade that assures that (Hoeschst) will continue to set and maintain artificially high prices' for Cardizem CD."
More Than Meets The Eye
The case is even more complicated than it first appears, for "there are some connections between" the plaintiffs' lawyer, Stephen Lowey, and Biovail, a Canadian company that is blocked from introducing its own generic version of Cardizem until the Hoechst case is settled. Under FDA rules, the first generic drug company -- in this case Andrx -- to bring a drug to market has "six months of exclusivity before any other generic firm can enter the same market." The Journal reports that in June, Biovail "retained Mr. Lowey to research Biovail's other legal options." A spokesperson for Biovail said the company "didn't initiate yesterday's action and that Biovail won't share in any proceeds from the litigation." The entire case takes place in the shadow of the debate over whether calcium channel blockers such as Cardizem "are more effective at preventing heart attacks or strokes than cheaper medications, such as beta blockers and diuretics, which have been available in generic form for years." The stakes in the current litigation are high for Hoechst. IMS Health notes that Cardizem CD "ranks among the top 20 best-selling drugs in the U.S., where its generated about $700 million in revenue for" the drugmaker last year (King, Wall Street Journal, 8/21).