FTC Charges Mylan with Restraint of Trade, Monopolization, and Conspiracy

Strategic Insights -

Mylan Laboratories, the nation's second-largest generic drug manufacturer, has been charged by the Federal Trade Commission with restraint of trade, monopolization, and conspiracy to monopolize the markets for two widely prescribed anti-anxiety drugs, lorazepam and clorazepate. The FTC alleges that Mylan's illegal conduct resulted in price increases of up to 3000 percent for these two essential medications, causing significant harm to consumers. The Commission will seek at least $120 million in consumer refunds and intends to file a complaint in U.S. District Court, seeking to enjoin the alleged illegal agreements and obtain monetary relief.

Key Takeaways:

  • Mylan, the nation's second-largest generic drug manufacturer, has been charged with restraint of trade, monopolization, and conspiracy to monopolize the markets for lorazepam and clorazepate tablets.
  • The FTC alleges that Mylan's illegal conduct resulted in price increases of up to 3000 percent for these two essential medications, causing significant harm to consumers.
  • The Commission will seek at least $120 million in consumer refunds and intends to file a complaint in U.S. District Court, seeking to enjoin the alleged illegal agreements and obtain monetary relief.
  • Lorazepam and clorazepate are two of the approximately 87 generic drugs that Mylan currently manufactures and sells in tablet form, with over 18 million lorazepam prescriptions and over 3 million clorazepate prescriptions issued annually.
  • Mylan's price increases for clorazepate tablets ranged from 1,935 percent to 3,219 percent, while the price increases for lorazepam tablets ranged from 1,940 percent to 2,682 percent.
  • The FTC's complaint will charge that Mylan sought to obtain an exclusive license for certain APIs, preventing other generic drug manufacturers from using those APIs to sell the corresponding drugs in the U.S.
  • Mylan's competitors matched the company's price increases for lorazepam and clorazepate tablets, further exacerbating the harm to consumers.
  • The Commission has established a Consumer Information Line for those wanting up-to-date information about the FTC's case against Mylan and three other companies.

Statistics:

  • At least $120 million in consumer refunds sought by the FTC
  • 18 million lorazepam prescriptions issued annually
  • 3 million clorazepate prescriptions issued annually
  • Lorazepam price increase: 1,940-2,682 percent
  • Clorazepate price increase: 1,935-3,219 percent
  • Mylan's 1998 revenues: $555.4 million
  • Mylan's 1998 net income: $100.7 million
  • Cambrex's 1997 revenues: $380 million
  • Cambrex's 1997 net income: $17.8 million
  • Gyma's 1997 sales: $91 million

Sources:

  • M2 Presswire, "US FTC: Mylan, nation's second largest generic drug maker, charged with restraint of trade, conspiracy & monopolization" (22 December 1998)
  • Federal Trade Commission, complaint against Mylan Laboratories, Inc. et al. (date not specified)