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For immediate release - Tuesday, January 7, 2003.

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Bristol-Myers to Pay States $155 Million in Prescription Drugs Antitrust Cases

States alleged the company took illegal action to prevent consumers and taxpayers from benefitting from cheaper generic versions of its brand-name drugs.

DES MOINES.  Attorney General Tom Miller said today that Bristol-Myers Squibb Co. will pay a total of $155 million to a group of states that alleged the company illegally delayed generic versions of two of the company's lucrative drugs from coming to market, thus forcing consumers, businesses, and taxpayers to pay higher prices for the drugs.

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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