The payments are contingent on the company reaching formal agreement with the states on other key settlement terms,
including specific injunctive relief barring any future violations. Miller said the states anticipate fairly swift resolution of
the remaining issues so the formal settlements can be presented to and approved by the courts.
The provisional financial settlement involves separate allegations by the states concerning two drugs marketed by Bristol-Myers - BuSpar, an anti-anxiety drug often used by older persons, and Taxol, a drug used in cancer chemotherapy. The
company will pay the states $100 million in the BuSpar matter and $55 million in the Taxol matter.
Various parties are likely to be eligible to claim compensation from the Bristol-Myers payments, such as consumers who
paid for the drugs out-of-pocket, and third-party payers, including state government agencies. After a final formal
agreement is reached, a claims process will be determined and presented for approval by the courts along with the
settlements. Thirty-five states (plus DC and PR) are involved in the BuSpar settlement, and 39 states (plus DC, PR, VI and
Guam) are involved in the Taxol settlement.
"In both cases, we alleged that Bristol-Myers Squibb engaged in fraud to unlawfully maintain its monopoly and exclusive
hold on the market for its drugs," Miller said. The states alleged that Bristol-Myers made false statements to the Food &
Drug Administration about its patents in an effort to stop competitors from selling cheaper generic alternatives and
unlawfully maintain its monopoly.
"The company harmed consumers, and it harmed taxpayers, who often have to pick up the tab for prescription drugs paid-for or subsidized by government programs," Miller said.
"When generic drugs become available, they usually reduce drug prices significantly," he said. A new generic drug often
sells for about 70% of the price of its brand-name counterpart, and as additional generics become available the generic price
may fall to about 30% of the price for the brand-name drug. Furthermore, generic versions typically quickly capture a large
share of the prescriptions, lowering costs to consumers, businesses, and government agencies.
The states had noted that Bristol-Myers had over $700 million in BuSpar sales in 2000, and that annual sales of Taxol
exceeded $1 billion by 1998. Bristol-Myers Squibb's total net sales worldwide for 2000 were over $18 billion, according to
the States' BuSpar suit.
"Prescription drugs are a huge business -- and a huge expense for consumers and taxpayers," Miller said. "Companies need
to play by the rules. That makes a level playing field for all businesses, and it protects consumers and taxpayers."
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