June 2,2005
Blue Cross
and Blue Shield of Minnesota (Blue Cross)
and three other health plans received a $12
million jury verdict in the U.S. District Court
for the District of Columbia yesterday in their
antitrust litigation against Mylan Laboratories
Inc.
"Pharmaceutical companies go
to great lengths to maximize their profits, and
unfortunately they sometimes cross legal
boundaries," said Tom Gilde, litigation counsel
for Blue Cross. "In this case, the largest
generic manufacturer in the United States
cornered the market on the active ingredient for
the generic versions of two popular anti-anxiety
medications and then promptly raised prices by
more than 2,000 percent."
Blue Cross and Blue Shield of
Minnesota filed suit in 2001, seeking $1.75
million in overpayments to Mylan. Because the
jury found that Mylan willfully violated
antitrust law, the award may be tripled and
attorneys fees awarded under applicable
Minnesota antitrust laws.
Blue
Cross Blue Shield of Massachusetts, the
Health Care Services Corporation (the parent
company for
Blue Cross plans in Illinois,
Texas
and New
Mexico) and Federated Mutual Insurance
Company were co-plaintiffs in the suit. The
Massachusetts plan and Federated were also
represented by Robins Kaplan, Miller & Ciresi, a
Minneapolis-based law firm.
In 1997 Mylan negotiated
long-term exclusive licensing agreements with
Cambrex Corporation and its subsidiaries
Profarmaco S.r.l. and Cbm Technologies, Inc., to
supply the active pharmaceutical ingredients
required to manufacture lorazepam and
clorazepate, the generic versions of AtivanŽ and
TranxeneŽ, respectively.
Following the exclusive supply
agreements, Mylan dramatically raised prices of
generic lorazepam and clorazepate tablets,
despite no significant increases in its costs.
For example, the average price of lorazepam
before the agreements was $16.95 for 100
5-milligram tablets. A few months later in 1998,
the price shot up to $64.31 for the same dose.
Mylan's cost increases were so
dramatic that its action was credited with
driving an overall increase in the country's
Producer Price Index (PPI) in April of 1998 and
helping the index of prescription drug prices
set a one-month record increase.
"As a health plan, we pay
these health care bills and take very seriously
our mandate to make health services as
economical as possible," said Gilde.