Lawsuits Target Barr-AstraZeneca Pact

The Prescription Access Litigation Project, a group of 17 consumer groups, yesterday filed lawsuits in federal court and seven state courts alleging that drug makers Barr Laboratories and AstraZeneca conspired to inflate the prices of the breast cancer drug tamoxifen, the New York Times reports. The lawsuit is seeking to "recoup ... excessive payments" for the drugs, which the plaintiffs say were made possible by a 1993 agreement between the two firms allowing Barr to sell a generic version of the drug, which AstraZeneca markets under the brand name Nolvadex (Petersen, New York Times, 5/10). Under the agreement, Barr agreed to drop its legal effort against the drug's patent and AstraZeneca paid Barr $21 million and allowed the generic manufacturer to sell the "unbranded version" of tamoxifen. According the lawsuit, Barr sells the drug at a 5% discount from the brand name price, even though generic drugs typically cost 30% to 80% less than brand names (Gellene, Los Angeles Times, 5/10).

Kim Shellenberger, director of the consumer coalition, said, "This illegal agreement was egregious. It forced women with breast cancer to pay very high prices at the same time they were dealing with their disease." Both firms said that the "agreement was legal" and that no wrongdoing was committed (New York Times, 5/10). Bruce Downey, Barr's chief executive, said he signed the agreement because he thought Barr would lose its legal efforts against the patent (Los Angeles Times, 5/10). Noting that courts had rejected three other lawsuits against the patent, he said the agreement allowed cancer patients to purchase the drug at a discounted price "10 years before they would have otherwise been able to." He added, "This agreement is not only legal, it is also pro-competitive and pro-consumer." AstraZeneca spokesperson Mary Lynn Carver said that because the patent for tamoxifen expires next year, it was not possible for there to be a "true generic drug" on the market (New York Times, 5/10). According to the lawsuit, Barr's sales for tamoxifen reached $350 million last year and AstraZeneca's totaled $500 million.

In December of 1998, the Justice Department said that it was investigating the agreement between the two companies, but has not contacted Barr since mid-1999. Downey said he believed that the delay signified that the case was "inactive" (Los Angeles Times, 5/10). Several bills targeting "pacts" similar to the one between AstraZeneca and Barr have been introduced in Congress, including a measure sponsored by Rep. Henry Waxman (D-Calif.) and Sen. Patrick Leahy (D-Vt.). Sens. John McCain (R-Ariz.) and Charles Schumer (D-N.Y.) have introduced legislation that would prevent drug firms from using loopholes in the Hatch-Waxman Act. In addition, the FTC is awaiting the "go-ahead" from the Bush administration to issue subpoenas to 90 drug firms to investigate if they have "improperly delayed the sale of generic drugs" (New York Times, 5/10).