Florida joins lawsuit over generic drug

Bristol-Myers is accused of boosting prices by blocking potential competitors on a popular cancer-fighting medication.

By ALISA ULFERTS, Times Staff Writer
© St. Petersburg Times
published June 5, 2002

TALLAHASSEE -- Florida joined 28 states in suing Bristol-Myers Squibb on Tuesday, accusing the drug company of illegally inflating the price of a popular cancer-fighting drug by shutting out competitors.

In announcing the lawsuit, Attorney General Bob Butterworth said the New York company's anticompetitive practices have added to rising health care costs by keeping cheaper generic versions of Taxol off the market.

"We cannot tolerate any unlawful attempt to delay the availability of lower cost drugs, especially those that are crucial in combating cancer and other life-threatening diseases," Butterworth said in a statement.

A standard course of breast cancer treatment with the name-brand drug costs about $8,000, compared to roughly half that for generic versions.

Robert Laverty, a Bristol-Myers spokesman, said Florida is merely joining ongoing litigation brought by generic drugmakers.

"The actual events at issue are several years old and have been the subject of litigation for some time," Laverty said. "We will continue to deal with the issues raised by this new suit, as we have been doing with other litigation related to these matters."

Butterworth's office began sending out subpoenas to Bristol-Myers Squibb in August 2001, a month before Gov. Jeb Bush announced a deal with the company to lower Florida's Medicaid costs.

The deal puts the company's drugs on a preferred list that doctors prescribe to Medicaid patients but exempts the company from providing the deep discounts on drug prices the state requires for inclusion on the list. Taxol is on that list.

In exchange, the company promised to save the state $16.3-million by teaching African-American and Hispanic Medicaid patients how to better manage illnesses ranging from breast cancer to depression and HIV/AIDS.

In a Sept. 5 statement announcing the deal, Bush said: "This again shows the value of working with industry to achieve long-term savings for our Medicaid program while providing valuable services to our most vulnerable citizens."

A Bush spokeswoman said the lawsuit was unrelated to the state's Medicaid contract with the company.

"The governor's office and Agency for Health Care Administration will hold the company to the agreed upon contract related to Medicaid," said Bush spokeswoman Elizabeth Hirst.

"Our state's agreements with two companies, including Bristol-Myers Squibb, will provide additional services to our state's Medicaid population and save Florida's Medicaid program $49-million," Hirst continued. Florida has a similar agreement with Pfizer.

Despite Bush's strategy of working with the boardroom to lower health care costs, Butterworth and other attorneys general decided the courtroom would deliver better results.

The Bristol-Myers Squibb lawsuit is the latest in a growing number of legal challenges by states, consumer groups, insurers and others against alleged anti-competitive practices by the pharmaceutical industry.

Such legal filings, which are often consolidated into a single class-action lawsuit, have become more prevalent in recent months as frustration grows with Congress' failure to curb skyrocketing drug prices. Critics blame the drug industry's multimillion-dollar political contributions and Capitol Hill lobbying for the lawmakers' inaction.

Tuesday's lawsuit accuses Bristol-Myers Squibb of preserving its monopoly on the tumor-shrinking drug for almost three years beyond its agreement with the federal government by manipulating the U.S. Patent and Trademark Office and fraudulently securing patents.

"They misrepresented certain studies that were done," said Assistant Attorney General Nick Weilhammer.

As a result, state lawyers say, generic versions of Taxol were kept off the market until 2000, forcing hospitals, cancer patients and state Medicaid programs to pay more for the brand-name drug.

Developed entirely with taxpayer money, Taxol was given to Bristol by the U.S. government in the early 1990s in exchange for a promise that generic companies could enter the market at the end of 1997. But when the time came, Bristol mounted a legal challenge to its would-be competitors.

In all, Bristol extended its five-year exclusivity period by nearly three years -- generating nearly $5-billion in additional sales.

The lawsuit was filed in the U.S. District Court for the District of Columbia.

-- Information from the Associated Press and Times files was used in this report.

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