23 state attorneys general today announced a $22.5 million settlement with pharmaceutical companies Abbot and Fournier over charges the drugmakers illegally blocked generic alternatives to the cholesterol-lowering drug Tricor from hitting the market.
The settlement comes from a 2008 lawsuit alleging that Abbott and Fournier's actions violated antitrust law, through practices such as "product hopping," where the drugmakers would make small changes to the product, stop promoting older versions of the drug, and manipulate the drug codes used to sell cheaper generic versions, in order to maintain a stranglehold on the market.
The states also alleged that Abbott and Fournier filed multiple lawsuits over patent rights in order to delay sales of generic versions of Tricor.
"Abbott and Fournier devised a complex scheme that illegally blocked cheaper generic drugs from entering the market," said California Attorney General Edmund G. "Jerry" Brown. "They used minor reformulations of the drug to delay competition and filed frivolous patent lawsuits. This scheme cost California and other states millions of dollars."
According to the state attorneys general, because Abbot and Fournier were preventing generics for coming to market, state and local governments had to pay higher prices for Tricor. Abbot alone recorded over $1 billion in profits from sales of Tricor in 2009.
"Idaho spends millions each year on prescription drugs for Medicaid and Idaho taxpayers bear the cost," Idaho Attorney General Lawrence Wasden said. "When those costs are inflated by unlawful anti-competitive practices, as we have seen in several cases involving major drug companies, we owe it to the taxpayers to recover their money and stop the unlawful activity."
Under the terms of the settlement, the states will be reimbursed for overcharges from purchases of Tricor, as well as reimbursing the attorneys general for fees and costs from the litigation. Abbott and Fournier are also forbidden from manipulating or blocking the drug codes for Tricor, if a generic manufacturer wants approval from the Food and Drug Administration to create an alternative, until after a specific time period.
Abbott and Fournier have already paid more than $67 million to privately settle consumer and third-party claims.