$100 MILLION ANTITRUST SETTLEMENT APPROVED MARYLAND CONSUMERS, AGENCIES TO GET REFUNDS
Attorney General J. Joseph Curran, Jr., announced today that a federal court in Washington, D.C. has given final approval to antitrust settlements that will refund over $100 million to consumers and government agencies in all 50 states and the District of Columbia. The settlement concludes antitrust litigation initiated in December 1998 against Mylan Laboratories and several other companies involved in the manufacture of generic anti-anxiety drugs lorazepam and clorazepate. The litigation conducted by state attorneys general alleged illegal agreements to monopolize the markets for these drugs, resulting in price increases from 1,900 percent to 3000 percent.
"This enormously successful lawsuit will result in the payment of refunds to hundreds of thousands of consumers harmed by this anti-competitive conduct," Attorney General Curran said. "Strong enforcement of our antitrust laws is necessary to prevent consumers from being victimized by collusion among companies in a position to dominate the market."
Last year, the defendants agreed to settle with Mylan paying $100 million and another defendant, SST Corp., paying $500,000. The settlement approved on February 1 will permit distribution of the settlement amounts to consumers and government agencies which paid higher prices as a result of the alleged conspiracy to raise prices.
The settlement provides for approximately $67 million to be distributed to consumers who paid higher prices for lorazepam and clorazepate and who submitted claim forms identifying their purchases. Government agencies such as Medicaid and state hospitals will receive approximately $29 million as compensation for the higher prices paid for their drug purchases or reimbursements. State attorneys general will receive $8.1 million in reimbursement of their costs of the litigation and for their attorneys fees.
With the support of 15 national pharmacy chains, including CVS, Rite Aid, Target, Walgreens and Wal-Mart, direct mail notice was sent to over $1.1 million consumers across the country. Extensive advertising and pharmacy notices also helped educate consumers about the process for obtaining a refund.
Over 240,000 purchasers have submitted claims for refunds, including 4,888 in Maryland. If funds are sufficient, consumers are expected to receive refunds of 60 percent of the amounts paid for lorazepam and 70 percent of the clorazepate amounts paid during the period January 1, 1998 through December 31, 1999. These percentages constitute 100 percent of the estimated overcharges. The size of the refunds will vary according to the amount of purchases.
If there is no appeal, the refunds are expected to be mailed in the Spring of 2002.
In Maryland, the largest portion of the government money, $445,285, will be paid to the state Medicaid office for its losses in paying higher drug prices for Medicaid recipients needing these drugs. Five percent of that amount, or $22,264, will go to non-Medicaid agencies.