Abbott Labs pays $22.5 million to settle allegations it blocked generic drug competition

Abbott Labs pays $22.5M to settle state lawsuits

WASHINGTON — Drugmaker Abbott Laboratories has agreed to pay $22.5 million to settle allegations that it tried to block generic competition to a popular cholesterol medication, according to state officials.

The agreement was announced Thursday by attorneys general from 23 states and the District of Columbia, who sued Abbott to recover costs to state Medicaid plans.

The multistate lawsuit alleged that Abbott and a unit of Belgium drugmaker Solvay Pharmaceuticals made minor changes to the formulation of TriCor to prevent cheaper generic versions from launching.

“These companies deprived taxpayers, state agencies, and consumers of a fair marketplace that would have lowered prices by offering less expensive generics,” said New York Attorney General Andrew Cuomo, in a statement.

New York is slated to receive $4.5 million from the settlement, the largest payment to any state.

Generic drugs can cost between 30 to 80 percent less than brand-name medications. Generic drugmakers typically launch low-cost versions of a drug after the patents on the original expire.

Several drugmakers, including Teva Pharmaceuticals, were slated to launch generic versions of TriCor in 2002, as the drug’s patents were set to expire. But the attorneys general allege that Abbott and Solvay made minor changes in the form and dosage strength of Tricor to renew its patent protection.

A spokesman for Abbott said the formulations provided useful options to patients in terms of dosing and convenience.

Abbott’s Scott Stoffel said company officials believe they acted lawfully.

“We agreed to settle the lawsuits to avoid the uncertainty of ongoing litigation,” said Stoffel.

North Chicago-based Abbott agreed last year to acquire Solvay for more than $6 billion. The deal is expected to close in the first quarter of this year. Abbott licenses the U.S. rights for Trilipix and TriCor from Brussels-based Solvay. The drugs are used to raise “good” HDL cholesterol while reducing triglycerides and “bad” LDL cholesterol.

Abbott reported $919 million in sales for TriCor and Trilipix during the first nine months of 2009.

Other states set to receive payments include Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Maine, Maryland, Minnesota, Missouri, Nevada, Oregon, Pennsylvania, South Carolina, Washington, and West Virginia.

(This version CORRECTS Corrects number of states graph two. ADDS detail.)