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FTC backs huge Mylan settlement

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WASHINGTON — The Federal Trade Commission on Wednesday approved a tentative $100 million settlement of claims that Mylan Laboratories Inc. fixed prices of anti-anxiety drugs widely used by senior citizens.

The settlement, the largest in FTC history, still must be approved by attorneys general in 32 states and U.S. District Judge Thomas Hogan.

"Anticompetitive acts in the pharmaceutical industry potentially cost consumers millions of dollars in higher prescription prices," the FTC's Richard Parker said in a statement. "This settlement serves notice of the Commission's determination to pursue investigations of such behavior and to seek disgorgement of ill-gotten gains in appropriate cases."

Thirty-two states, the District of Columbia, patients and the federal government filed lawsuits in 1998 accusing the Pittsburgh-based pharmaceutical giant of illegally increasing prices for two tranquilizers and cutting off competition. The drugs are used to treat Alzheimer's disease and other ailments.

Pennsylvania Attorney General Mike Fisher said the company hiked the price of clorazepate 3,000 percent in January 1998 and lorazepam by 2,500 percent in March that year.

The FTC said Mylan raised the price of a 500-count bottle of 7.5 mg clorazepate tablets from $11.36 to $377.00 and raised the price of a 500-count bottle of 1 mg lorazepam tablets from $7.30 to $191.00.

FTC Chairman Robert Pitofsky said users of the drugs paid even higher prices, adding that many may have reduced the number of tablets they took or stopped taking the drugs altogether because they could no longer afford them.

If finalized, the $100 million will be divided among the states, including Pennsylvania, which sued Mylan. The money then will be used to repay consumers and state agencies who paid the hiked prices for the drugs.

Other states that sued include Texas, Alaska, California, Louisiana, Minnesota, North Carolina, Tennessee and Vermont.

The lawsuits alleged that Mylan cut off competition by striking an exclusive agreement with Profarmaco S.R.L. in Milan, Italy, a crucial supplier. The suits said other suppliers could not make enough of the drugs for Mylan's competitors.

The company says the deal was intended to ensure Mylan's source of ingredients would not be interrupted.

The FTC alleged that Mylan, Cambrex Corp., Profarmaco S.R.L., and Gyma Laboratories of America, Inc. worked to give Mylan the power to raise the price of generic lorazepam and clorazepate by depriving Mylan's competitors of the active ingredient necessary to manufacture them.

Generic drugs are identical versions of branded drugs that usually sell at a fraction of the price. Many companies that manufacture generic drugs purchase the ingredients from a third-party.

Mylan spokeswoman Patricia Sunseri did not immediately return calls seeking comment Wednesday.