States File Suit Against Aventis, Andrx Over Generic Drugs
The attorneys general of 15 states and the District of Columbia yesterday filed a federal lawsuit in U.S. District Court in Detroit charging French pharmaceutical maker Aventis S.A. and generic drug manufacturer Andrx Corp. with violating anti-trust laws by "conspiring" to keep a generic form of the blood pressure drug Cardizem CD off the market, the AP/New York Times reports. Michigan Attorney General Jennifer Granholm (D) said Aventis sued Andrx in early 1996 for infringing the patent and trademark of Cardizem, but rather than asking the generic firm to pay damages, Aventis settled by paying $89 million to keep Andrx's cheaper version off drug store shelves for 11 months beginning in July 1998. However, the AP/Times reports that the deal was later "cancelled" after a federal investigation began. Cardizem costs approximately $73 per month, compared to the $32 per month that generics, such as Andrx's Cartia XT, would have cost. Granholm added that the average consumer taking Cardizem "probably paid an extra $400 a year as a result of this monopoly." Aventis made $700 million in the 11 months the generic drug was prevented from entering the market, Granholm said (AP/New York Times, 5/15). Led by Michigan and New York, the states -- Arizona, California, Idaho, Indiana, Maine, Minnesota, New Mexico, North Carolina, Oklahoma, Utah, Vermont, Washington, West Virginia and the District of Columbia -- seek at least $100 million in restitution. They argue that the drug makers' "arrangement" created higher prescription drug costs in state-run health plans such as Medicaid (Gold, Wall Street Journal, 5/15). The federal suit is the consolidation of more than 20 civil lawsuits filed by patients and insurance companies, including Aetna U.S. Healthcare.
The federal suit also is the first by the states to charge abuses of the 1984 federal Hatch-Waxman Act, which aims to "ease introduction of generics." But government investigators say that the law's loopholes have permitted brand-name drug makers to "delay competition." Last month, the Federal Trade Commission settled a civil antitrust complaint against the firms over Cardizem, preventing the companies from making other deals that would "restrict introduction of lower-cost generic medications." Aventis and Andrx have denied those allegations (Gellene, Los Angeles Times, 5/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.