NY AG Announces $22.5 Mil Settlement with Abbott Labs
Last week, New York Attorney General Andrew Cuomo announced Abbott Laboratories and French drugmaker Fournier have agreed to pay $22.5 million to settle a case alleging the companies attempted to block the development of a generic alternative to their popular drug Tricor. Tricor was developed to help patients lower their "bad cholesterol" and raise "good cholesterol" to reduce the risk of heart attacks and strokes. The drugmakers will pay shares of the settlement to New York, 22 other states and the District of Columbia, according to a news release by the Attorney General's office. About $4.5 million goes to New York.
When the suit was filed in 2008, Tricor had reported sales of about $1.2 billion.
The suit alleged that the companies sought to block the development of cheaper generic versions of Tricor by two methods. First, by a practice called "product switching" which involves making small modifications of little or no clinical value to the original drug such as changing the form or dosage slightly and marketing it as a "new and improved" version. This prevents pharmacists from filing prescriptions for the original drug with a generic, because the FDA requires generics be used only if they are in the same form and dosage as the original.
Abbott Labs and Fournier were also accused of "evergreening," which is the practice of extending patent protection over a drug by adding patent after patent to keep the generic stalled in production, waiting for the process to end. The suit also alleges the "filing [of] baseless patent-infringement suits against generic drugmakers" to help keep Tricor's monopoly on its patent.
In response to news of the settlement, an Abbott spokesman said, "We agreed to settle the lawsuits to avoid the uncertainty of ongoing litigation." He said Abbott continues to believe its actions were lawful and that new formulations of Tricor have benefited patients.
Last November, Abbott Labs also settled a patent dispute with Teva Pharmaceutical Industries Ltd., which has been attempting to produce a generic version of Tricor.
- UPDATE 2-Abbott to pay states $22.5 mln in TriCor deal (Reuters)
- Abbott Switched TriCor Patents, But Was It Legal? (Pharmaphorum)
- Frequently Asked Questions About Patents (Findlaw)