Attorney General Gansler Announces $22.5 Million Settlement with Makers of Cholesterol Drug TriCor

BALTIMORE, MD ( January 7, 2010) - Attorney General Douglas F. Gansler today announced that he, along with 23 other state attorneys general, has reached a $22.5 million settlement with pharmaceutical giants Abbott Laboratories, Fournier Industrie et Sante and Laboratories Fournier, S.A to settle allegations that the companies illegally thwarted competitors from offering cheaper generic drugs as substitutes for the cholesterol-controlling prescription drug TriCor.

“Abbott and Fournier devised a complex, illegal scheme to thwart less costly generic drugs from entering the market,” said Attorney General Gansler. “As a result, Maryland agencies and consumers were forced to pay artificially high prices for TriCor and were deprived of any generic alternatives. Today’s agreement helps insure that the State and its consumers receive the huge savings that generic competition brings.”

Since 1998, Abbott has held the sole license from Fournier to sell TriCor, whose annual sales exceed $1 billion, in the United States. By 2002, several other drug companies sought approval from the FDA to market a generic equivalent to TriCor. To be approved by the FDA, the manufacturer must show that the generic drug has the same active ingredients and the same therapeutic effects as the brand-name product. Once a generic drug is marketed, most States and most health plans require pharmacists to substitute the generic drug for the brand-name drug. Experience shows that once generic alternatives to a drug are available, the market price of the drug can decrease by as much as 80%.

Fearing that generic competition would end their monopolistic market position and premium prices for TriCor, Abbott and Fournier allegedly devised a multi-faceted scheme to delay and prevent the approval and marketing of generic TriCor. The scheme included the use of several patents obtained from the Patent Office without disclosing highly relevant information, and the filing of over a dozen lawsuits against potential generic competitors.

The companies also allegedly engaged in “product hopping,” making minor changes in the form and dosage strength of TriCor that did not provide any significant health benefits over previous TriCor formulations but that did delay FDA approval of the generic versions of TriCor. Additionally, as soon as the new TriCor formulations were approved by the FDA, Abbott and Fournier withdrew the old formulations, marketed the new formulations as superior, and caused the deletion of database reference codes necessary for a generic formulation to receive favorable generic treatment under most state laws and health plans.

Today’s settlement requires the companies to cease product hopping and to allow generic competition to TriCor. It also requires the defendants to pay to the states $22.5 million. This is in addition to the over $65 million that the defendant drug companies were required to pay to consumers and certain third party purchasers in related litigation. Maryland’s share of the settlement is just over $600,000.

The other states involved in today’s lawsuit include: Arizona, Arkansas, California, Connecticut, District of Columbia, Florida, Idaho, Iowa, Kansas, Massachusetts, Maine, Michigan, Minnesota, Missouri, Nevada, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Washington, and West Virginia.

The Antitrust Division of the Office of the Attorney General brought the case against Abbott and Fournier. In making today’s announcement, Attorney General Gansler thanked Alan Barr and Schonette Walker for their excellent work on the case.