Oregon Department of Justice

Attorney General Hardy Myers today announced that lawsuits filed by Oregon, 30 other states and the Federal Trade Commission in 1998-99 against pharmaceutical giant Mylan Laboratories of Pittsburgh, Pennsylvania have been settled in principle for $100 million.

The lawsuits alleged Mylan, New Jersey-based Cambrex Corporation, Italian pharmaceutical ingredient manufacturer Profarmaco S.r.l., and New York-based drug distributor Gyma, illegally caused a significant price increase in two anti-anxiety drugs, lorazepam and clorazepate, used to treat Alzheimer's disease and other afflictions.

"Consumers and state agencies suffered significant financial burden from drug overcharges as a result of the defendants' unlawful actions," Myers said. "The defendants cut-off competitors' supplies of the drugs' active ingredients which allowed Mylan to increase prices on each drug 2,000 percent or more over a short period."

Oregon's share of the settlement will be determined at a later date. Oregon also will be reimbursed for attorney fees and investigative costs.

"In order to restore competitive balance to the pharmaceutical market, Mylan also agrees to refrain from entering into business arrangements with other companies that substantially lessen competition," Myers said. This is in addition to the monetary terms of the settlement including reimbursing the states for up to $8 million in legal costs.

Final terms of the settlement are expected to be completed in several weeks and are subject to approval by the Federal Trade Commission, the State Attorneys General and U.S. District Court Judge Thomas F. Hogan. Mylan's board of directors also has approved the settlement terms in principle.

Today's settlement in principle does not affect numerous pending class-action lawsuits filed by private attorneys on behalf of insurers and drug retailers.