The Chief
August 31, 2001

Hit Pharmaceuticals

PBA Suits Charge Drug Price-Fixing

By William Van Auken

The Patrolmen's Benevolent Association filed Federal class-action lawsuits in four separate states August 21, charging pharmaceutical companies with violating anti-trust laws by conspiring to keep cheaper generic drugs off the prescription market.

"These allegedly illegal agreements between brand-name and generic companies force us, our members and others to pay high prices for very important, common medications," said PBA President Patrick J. Lynch. "Our union and our members have been squeezed by these inflated prices, and we are bringing these lawsuits to fight back."

Funds Cover 46,000

As trustee for the two health and welfare funds that provide prescription drug benefits for 46,000 active and retired city cops, Mr. Lynch is the plaintiff in the suits.

The suits were filed simultaneously in Federal courts in Brooklyn, West Virginia, Newark and Washington, D.C., jurisdictions where nine brand-name and generic pharmaceutical companies named in the suits have their headquarters.

Charges in the lawsuits are: Pfizer, Inc.; Mylan Laboratories, Inc.; Barr Laboratories, Inc.; Zeneca, Inc.; Astrazeneca, PLC; Shering-Plough Corporation; Upsher-Smith laboratories; American Home Products Corporation; and Bristol-Myers Squibb Co.

The complaint filed in West Virginia accuses Pfizer, maker of Procardia XL 30 - a brand-name drug used to treat hypertension and angina - of making a deal with Mylan Labs, which had developed a generic equivalent of the drug, that effectively preserved Pfizer's monopoly.

The agreement was the product of a 1997 lawsuit brought by Mylan, one of the largest U.S. generic drug manufacturers, challenging Pfizer's patent. Pfizer counter sued for patent infringement, resulting in a settlement last year that allowed Mylan to market Pfizer's drug, rather than its own. As a result, the police union charges, there was no true generic competition and the PBA was compelled to pay an artificially inflated price for the drug.

In the suit filed in Brooklyn Federal court, the PBA accuses Zeneca and Astrazeneca, manufacturers of tamoxifen, the most widely prescribed breast cancer drug, of entering into a similar out-of-court settlement with the generic manufacturer, Barr Labs. In return for the exclusive right to sell a Zeneca-manufactured generic for only five percent less than the brand-name drug, Barr dropped its successful challenge to Zeneca's patent. According to the suit, a genuine generic would have been sold at 30 to 80 percent less than the brand-name drug.

The lawsuit filed in Newark accuses Schering-Plough of forcing inflated prices on PBA members and other consumers for the past three years as the result of an allegedly illegal deal in which it paid a division of American Home Products $80 million to keep its generic versions of a popular medication for high blood pressure, K-Dur20, off the market.

In Federal court in Washington, D.C. the PBA went after Bristol-Meyers Squibb, accusing the pharmaceutical giant of filing false patent information with the Food and Drug Administration in an attempt to prevent competitors from marketing a generic alternative to BuSpar, a commonly prescribed anti-anxiety drug.

"To file four suits in one day against some of the biggest drug companies in the world is unprecedented," said Jeffrey J. Corrigan, a former Federal prosecutor with the Justice Department's Anti-Trust Division in New York City who is representing the PBA.

Acknowledging that this kind of lawsuit is associated more with consumer advocates like Ralph Nader that the leader of a police union, Mr. Corrigan said, "Cops serve the public good, and they are serving the public good in this suit too."