Settlement In Buspar Case Submitted To The Court

Attorney General Spitzer today announced a final settlement in the federal antitrust suit brought against Bristol-Myers Squibb Co., Watson Pharma, Inc. and Danbury Pharmacal, Inc, which could provide to individual users of the anti-anxiety medication BuSpar hundreds of dollars in compensation.

New York and a coalition of other States charged, in a lawsuit filed in December, 2001, that Bristol illegally maintained its monopoly over BuSpar by misleadingly claiming that a newly obtained patent covered the drug, and by agreeing with certain drug manufacturers to delay the entry of lower-cost generic substitutes.

Bristol had previously agreed in principle to pay the States' up to $100 million to resolve the matter. The Attorney General is filing papers today in federal court that contain the final agreement and seek court approval to begin the formal notice and claims process. "This settlement will help compensate New Yorkers who overpaid for this medication," Spitzer said. "It is important that generic alternatives come to market and that those who try to manipulate the system are held accountable."

As a result of the settlement, following final approval by the Court, a nationwide consumer fund will be established and administered by the states, which will include monies obtained in settlement of private class actions. The $41 million consumer fund will provide compensation to consumers who purchased the drug from January 1, 1998 through January 31, 2003.

Upon providing proof of their BuSpar purchases, consumers could receive full financial compensation for their damages. For some users, this may result in payment of $200-$300. Consumers who purchased the drug can obtain a claim form by calling 1-800-678-9587 or by visiting the web site www.busparsettlement.com.

New York, Texas and Maryland led a group including 35 other states, the District of Columbia, and Puerto Rico, in the BuSpar litigation.

Under the settlement, New York State will also receive substantial monies for damages incurred by state and local agencies that purchased the medication. While the ultimate allocation among the litigating states has not yet been determined, it is contemplated that more than $50 million will be set aside to be divided for this purpose.

The settlement agreement also contains strong injunctive relief, to prevent Bristol from engaging in anti-competitive conduct in the future. Bristol is barred from attempting to re-list the patent at issue in the Orange Book. Bristol is also barred from listing certain other types of patents in the Orange Book, if the patents would unreasonably delay generic entry. Finally, Bristol is forbidden to enter into agreements with generic drug manufacturers to settle patent infringement suits, if the result of an agreement could adversely affect competition. The proposed injunction, which has a ten-year term, was negotiated in coordination with the Federal Trade Commission.

The matter is being handled by Assistant Attorneys General Richard L. Schwartz and John A. Ioannou, and the Antitrust Bureau's Director of Economics Hampton Finer.