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Office of the Attorney General News Release Archive

Thursday, July 13, 2000

CORNYN ANNOUNCES SETTLEMENT WITH MYLAN LABORATORIES

$100 million recovered in pharmaceutical price-fixing scheme

AUSTIN - Texas Attorney General John Cornyn today announced a $100 million settlement with pharmaceutical giant Mylan Laboratories and three other defendants.

The settlement in principle is the result of a 1998 lawsuit filed by 33 state attorneys general. The 1998 lawsuit alleged that Pittsburgh-based Mylan and the other defendants illegally increased the price for two drugs used to treat Alzheimer's disease and other afflictions.

"Our investigation has shown that price-gouging has cost consumers millions and millions of dollars over the past two years,"said Attorney General Cornyn. What is even more troubling is that the drugs affected by the illegal price increase are medications frequently prescribed for nursing home and hospice patients."

In addition to the amount of the restitution and damages of the settlement in principle, Mylan has agreed to certain restrictions in its supplier agreements in order to restore competitive balance to the pharmaceutical market. Mylan will also reimburse the states up to $8 million for legal and investigative costs.

Although the allocation of settlement proceeds among the states has not yet been determined, Texas' share may total up to $6 million to reimburse the state agencies and consumers who paid inflated prices for the Mylan products in question.

The state attorneys general coordinated their litigation with the Federal Trade Commission, (FTC), which also sued Mylan. In July 1999, the court found that the FTC has the legal authority to seek monetary remedies such as the forfeiture of illegally obtained profits, which the complaint in this case seeks. The $100 million settlement in principle includes both recovery of damages by the states, and the forfeiture sought by the FTC.

Other states that have sued Mylan include Arkansas, California, Florida, Illinois and New York.

The final terms of the settlement are expected to be completed within several weeks, and are subject to approval by the FTC, the 33 state attorneys general and U.S. District Court Judge Thomas F. Hogan. Mylan's board of directors has already approved the terms of the settlement in principle.

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