VITAMINS: Roche, BASF Fined $725M for Price Fixing
Two giant pharmaceutical and chemical companies, charged with a vast price-fixing scheme in the worldwide sale of vitamins, agreed yesterday to pay a record $725 million fine in a settlement with the Justice Department. Joel Klein, chief of the DOJ's antitrust department, said the cartel formed by Roche Holding AG, BASF AG and Rhone-Poulenc SA -- which cooperated with federal investigators under an amnesty program -- was the "most pervasive and harmful criminal conspiracy ever discovered." He said the companies' price-fixing "hurt the pocketbook of virtually every American consumer, anyone who took a vitamin, drank a glass of milk, or had a bowl of cereal" (Wilke/Warren, Wall Street Journal, 5/21). Roche was fined $500 million; BASF, $225 million in the settlement, the largest ever imposed in a federal antitrust case, the Newark Star-Ledger reports (Silverman, 5/21). The New York Times reports that officials from the companies each year "would gather clandestinely for a few days at a European hotel or an executive's home for what some called the 'top-notch meeting' and others the 'summit conference' to plan 'the budget for Vitamin Inc.'" The executives "set production quotas, prices and distribution" for vitamins "A, B2, B5, C, E and Beta Carotene ... the budget would be reviewed by mid-level executives to make sure everything was working as planned, or it would be adjusted to reflect corporate profits and worldwide demand" (Labaton/Barboza, 5/21). The Washington Post reports that Roche, BASF and Rhone-Poulenc hold "nearly 80% of the $3 billion-a-year vitamin market" (Segal, 5/21).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.