"NYsues GSK over patent manoeuvres
By Christopher Bowe in New York and Geoff Dyer in London
Published: May 20 2004 5:00
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c
New York City has accused GlaxoSmithKline of fraud in two lawsuits that allege the UK drugmaker improperly stalled lower-priced generic competition for two drugs by frivolous patent manoeuvres.
The two lawsuits, filed yesterday, said GSK's anticompetitive moves, including fraudulent moves to obtain new unrelated patents, extended patent protection for the lucrative antidepressant Paxil and antibiotic Augmentin.
The Paxil suit was filed in federal court in Philadelphia, while the Augmentin suit was filed in federal court in Virginia.
New York City said GSK's schemes maintained higher prices for the drugs, in the absence of generic competition, thereby defrauding the city by forcing it to pay more than necessary.
Michael Cardozo, New York City's chief attorney, said the city was on the hunt for pharmaceutical fraud.
He warned the industry that he expected to file another "major lawsuit' soon, and GSK was only part of the probe into drugmakers.
"These suits demonstrate the city's ongoing plans to attack the rapid increase in the city's prescription drug expenditures resulting from unlawful and fraudulent practices," he said.
New York City's action is the latest example of the increasing legal scrutiny from all US governmental levels on the pharmaceutical industry's practices, costs and pricing.
Federal prosecutors, arms of the justice department, are conducting numerous investigations including those at practices of US drugmakers Schering-Plough, Eli Lilly and Bristol-Myers Squibb.
Last week Pfizer pleaded guilty to criminal fraud and paid $430m over marketing of Neurontin, an epilepsy drug.
The Pennsylvania state attorney-general filed a lawsuit in March alleging a conspiracy to inflate drug prices to the government by 13 companies.
New York City pays a portion of federal-state funded Medicaid, a health programme for poor patients. In 2002, it paid $23.1m for Paxil, which now has generic rivals, and $14.7m for Augmentin. It seeks triple damages, for
the overcharges, estimated in the "millions of dollars".
GSK said it "has followed the law in the way we filed and defended our patents".
* Meanwhile, AstraZeneca, the Anglo-Swedish group, has entered a new war of words with consumer lobby group Public Citizen over its new cholesterol-lowering drug Crestor.
Public Citizen wrote to the Food and Drug Administration this week to urge the withdrawal of Crestor based on new evidence of side-effects including cases of rhabdomyolsis, a muscle wasting disease, and kidney failure. AstraZeneca said yesterday the group used "an inappropriate analysis of the reports of the incidence and causality of muscle and renal-related events".