June 6, 2001

Maine Attorney General G. Steven Rowe announced today that Maine has taken action against two major pharmaceutical manufacturers for conspiring to deprive consumers of access to a less expensive generic version of an important heart medication.

"With this lawsuit we join other states seeking to remedy the injustice suffered by countless people - most of them elderly - who were forced to pay excessive prices for their medication," said Attorney General Rowe.

The lawsuit alleges that Aventis (as successor in interest for Hoechst) and Andrx (a Florida-based company) reached an illegal agreement whereby Hoechst paid Andrx millions of dollars not to compete with Hoechst' product known as Cardizem CD.

Maine is asking the court to award treble damages to compensate consumers and state agencies for the artificially high prices that resulted from the conspiracy. The lawsuit alleges violations of antitrust and consumer protection laws.

Cardizem CD is a highly effective treatment for high blood pressure, chest pains and heart disease. During 1997 alone, Hoechst earned over $700 million from sales of Cardizem CD, the company's largest revenue producer.

"Prescription drug prices and drug coverage are major concerns for consumers in Maine," said Attorney General Rowe. "When a drug manufacturer illegally prevents the public from accessing low-cost alternatives, health care expenses go up and health care quality goes down, especially among the low-income who would most benefit from the lower priced generic."

He added, "the primary consumers of Cardizem CD are elderly, including those on Medicare and fixed incomes. These vulnerable members of our community should not be asked to choose between affording their heart medication and paying rent or putting food on the table."

Historically, the first generic into the market is sold for approximately seventy percent of the price of the brand name version. As additional generics become available, the price for a generic version often falls to thirty percent of the brand name price. Additionally, after a relatively short period of time, almost ninety percent of the prescriptions for the drug will be filled with generic versions, at great savings to consumers and businesses.

Hoechst and Andrx prevented consumers from switching to a generic alternative by conspiring to prevent Andrx's generic version of Cardizem CD from entering the market. Andrx would have been legally able to begin marketing its product called Cartia XT in July 1997, to compete with Cardizem CD. Instead, Andrx entered a written agreement with Hoechst under which it did not market Cartia XT, and in return Hoechst paid Andrx $10 million every three months. Hoechst eventually paid Andrx just under $100 million for keeping Cartia XT from the public for almost a year. The agreement also prevented other generics from entering the market.

The Hoechst-Andrx deal was cancelled after intense negative criticism of the arrangement, the filing of private lawsuits and the beginning of an investigation by the Federal Trade Commission. To date, consumers have not received any compensation for the artificially high prices they were forced to pay during the time the agreement was in effect.

One court has already ruled that the agreement between Andrx and Hoechst was per se illegal, according to Assistant Attorney General John Brautigam. "Private companies cannot agree to keep a generic version of a drug off the market simply to shore up their profit margins. One federal court took a close look at this and found that this is a classic antitrust conspiracy, keeping the market from properly functioning by preventing introduction of a cheaper, equally effective product."

Brautigam added, "Over the next three to four years the patents will expire on many brand-name drugs, allowing competition for lower-priced generics. Law enforcement authorities across the country will be watching to make sure that drug manufacturers do not conspire to deprive consumers of access to less expensive but equivalent medications."

The group of state Attorneys General filed the case in the Eastern District of Michigan, where private lawsuits against Andrx and Hoechst have been consolidated for pretrial proceedings.