Spitzer Announces N.y, 28 Other States File Lawsuit Against Bristol-myers Squibb Seeking Compensation For Consumers
Attorney General Spitzer today announced that New York and 28 other states have filed a lawsuit against Bristol-Myers Squibb (BMS) for unlawfully keeping a cheaper generic alternative to the company's anti-anxiety drug BuSpar off the market, which forced consumers and New York taxpayers to pay higher prices for the drug. The lawsuit could benefit New York consumers and others who were harmed by the company's activity and could provide millions of dollars in restitution.
BuSpar, the brand name of buspirone hydrochloride, is a widely prescribed drug used to treat anxiety. The drug has been a significant source of income to BMS, and during last year alone, the company earned over $700 million from sales of BuSpar.
In a complaint filed in federal court in New York today, Spitzer alleges that BMS violated federal and state antitrust laws by obtaining a new patent extending BuSpar's exclusive hold on the market. The complaint alleges that BMS knowingly made false statements to the FDA concerning the scope of its new patent in an effort to prevent generic drug manufacturers from bringing to market a generic version of BuSpar. Spitzer further alleges that BMS's activities were designed to extend its patent monopoly over BuSpar, thereby preventing less expensive generic alternatives from coming to market and denying consumers the benefits of the lower generic price.
"The ever-increasing price of prescription drugs is a major concern for consumers in New York. Promoting the availability of generic versions of widely prescribed brand name drugs will help lower the costs for consumers, especially senior citizens," Spitzer said. "Our most vulnerable should not be asked to choose between affording medication and paying rent or putting food on the table. We must fight for them."
Beginning in November of 2000, BMS's improper actions kept generic BuSpar off the market for nearly four months. By keeping BuSpar off the market, Spitzer said, BMS adversely affected tens of thousands of consumers across the United States, including consumers in vulnerable populations, such as the elderly.
It is estimated that the cost to New York taxpayers could be in millions of dollars. From November 2000 to March of 2001 the state's Medicaid program paid more than $7 million for BuSpar prescriptions for tens of thousands of Medicaid recipients.
Historically, when a generic drug enters the market, it is sold for approximately 70% of its brand name counterpart's price. As additional generics for the same brand name drug become available, the price of generic versions often fall to 30% of the price of the brand name. Additionally, after a relatively short period of time, almost 90% of the prescriptions for the drug will be filled with one of the generic versions at a much lower cost to consumers and businesses. Under New York law, generic substitution is mandated unless the prescribing physician states otherwise.
The Antitrust Bureau of the New York State Attorney General's Office, together with the Texas Attorney General's office, is leading a multistate group of 29 states and Puerto Rico in the case. The coordinated state group has filed in the Southern District of New York where a number of private lawsuits against BMS have been consolidated for pretrial proceedings.
The matter is being handled by New York Assistant Attorneys General John A. Ioannou, Richard L. Schwartz and Deputy Bureau Chief Kathleen L. Harris. The AG's Health Care Bureau also assisted in the investigation.