Two major drug manufacturers, Bristol-Myers Squibb Co. and Pfizer, both based in New York, have negotiated settlements over allegedly illegal practices aimed at extending their profits on key products. Bristol-Myers agreed to a consent order with the Federal Trade Commission, which in a 27-page complaint had charged the company with illegally monopolizing the market for three drugs -- Taxol and Platinol, both cancer therapies, and BuSpar, an antianxiety drug. Under the order, Bristol-Myers can no longer obtain 30-month stays on certain patents. The FTC alleged that the company exploited patent law and deceived the U.S. Patent and Trademark Office to preserve its monopoly on the drugs, which represented $2 billion of its $13 billion in annual sales. In addition, regulators alleged that Bristol-Myers paid a competitor $72 million to not produce a generic version of BuSpar.
The consent decree is subject to a 30-day comment period and must be approved by the FTC commissioners. "This case, and others we have brought and will bring, stands for an important proposition: Competition must be on the merits, not through misusing the government to stifle your competition," FTC Chairman Timothy Muris said in a written statement. In January, Bristol-Myers agreed to pay $670 million to state attorneys general to resolve similar allegations.
Pfizer, meanwhile, has agreed to refund $49 million to Medicaid programs in 47 states and the District of Columbia to settle claims that Warner-Lambert, which Pfizer acquired in 2000, failed to give Medicaid as low a price on the cholesterol-control drug Lipitor as it offered other buyers. Pfizer "knowingly misreported and underpaid its Medicaid rebates for Lipitor," Pennsylvania Attorney General Mike Fisher alleged in a written statement. As part of the settlement, Pfizer entered into a corporate integrity agreement with HHS' inspector general's office requiring monitoring of Pfizer's marketing and sales practices for the next five years, Fisher's office said. -- by Mark Taylor and Vince Galloro