Office of the Attorney General News Release Archive


Friday, April 27, 2001

CORNYN, STATES SECURE EARLY SETTLEMENT WITH MYLAN LABS

Major Antitrust Case Could Return $4 Million to Affected Texas Consumers

WASHINGTON, D.C. - Texas Attorney General John Cornyn joined the ranks of all state attorneys general and the Federal Trade Commission (FTC) today in obtaining preliminary approval of a settlement with generic drug manufacturing giant Mylan Laboratories Inc. The measure closes the door on major antitrust schemes and price hikes that began in early 1998.

Overall, the company has agreed to return $100 million, with about $72 million of this earmarked specifically for distribution to individual consumers injured by the major price increases enacted by Mylan. In the process, the company effectively shut out any competitor. Texans affected by price hikes of these Alzheimer's disease and anxiety treatment medications may be entitled to reimbursement from the total the state receives, which could reach $4.3 million.

"Here we have a blatant example of a pharmaceutical giant scheming to mow down its competition, then sending the prices of its medications to levels well beyond the reach of many in need, all the while preying on the most defenseless Texans, the elderly or infirm," said Attorney General Cornyn. "We're glad to see an end to this outrage."

Consumers who purchased the medications lorazepam or clorazepate from January 1998 through December 1999 and were not reimbursed by any type of insurance may be entitled to file a claim for a refund check for at least a portion of their purchases. The consumer claim period will extend from June 1 until Sept. 29.

In their court filings, the state attorneys general and the FTC allege that Mylan implemented a strategy to drastically increase the prices of these medications, in some cases more than 3,000 percent. For example, uninsured consumers who once paid about $11 for one full prescription of one of these medications, came to pay a staggering $377 per prescription. Mylan accomplished these stunning price increases by cutting off its competitors' access to the raw materials needed to manufacture the generic drug lorazepam, and by entering into an agreement to increase the price to its competitors of the raw material for the generic drug clorazepate.

The company negotiated an exclusive license with Profarmaco and its distributor, Gyma, for the active ingredient for lorazepam. The court filings also allege the company had an understanding with SST Corp., the U.S. supplier of the Italian-made raw material for clorazepate, to increase the price of this material to Mylan's competitors. (SST, incidentally, has agreed to pay $500,000 in monetary relief.)

Under the reimbursement plan, Texas consumers who submit valid claims will receive refund checks after the court grants final approval of the settlement. Consumers may obtain claim forms and more detailed information next week about the settlement and their legal rights by calling toll-free 800/899-5806. To obtain this information online next week go to:

www.agsettlement.com.

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Contact: Mark Heckmann, Tom Kelley or Jane Dees Shepperd at (512) 463-2050.
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