Healthy Skepticism Library item: 7213
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Kaplan P.
US retailers sue Astrazeneca over Nexium strategy
Reuters 2006 Dec 15
http://tinyurl.com/y5yucj
Abstract:
Several major U.S. retailers have sued AstraZeneca Plc (AZN.L: Quote, Profile , Research), accusing the drugmaker of using illegal tactics to maintain its monopoly over the heartburn medication Prilosec even after the drug’s patent expired in 2001.
Eight retailers, including Walgreen Co. (WAG.N: Quote, Profile , Research), Kroger Co. (KR.N: Quote, Profile , Research) and Safeway Inc.
(SWY.N: Quote, Profile, Research), filed a civil suit in federal court, alleging that AstraZeneca used fraud and “exclusionary conduct” to hold on to its dominant position by switching patients from Prilosec to its nearly identical, patent-protected drug Nexium.
“While this product-switching strategy was enormously successful and profitable for AstraZeneca, it was an economic disaster for American consumers,” the lawsuit said.
U.S. sales of Nexium totaled $879 million for the third quarter, Denney said.
AstraZeneca devised a strategy in anticipation of the expiration of the Prilosec patents, known as the Shark Fin Project, to preserve its market position, according to the suit.
At the same time, the lawsuit claims AstraZeneca effectively withdrew Prilosec from the market. The company got approval from the U.S. Food and Drug Administration to sell it over-the-counter causing some insurers to stop providing coverage for generic Prilosec.
The costly product-switching strategy “made no economic sense absent its effect of impairing generic competition for Prilosec,” the lawsuit contends.
AstraZeneca spokeswoman Emily Denney said late on Friday the London-based company “denies the claims, and we will vigorously defend against them.” She declined to elaborate.
Filed on Dec. 7 in the U.S. District Court for the District of Columbia, the lawsuit seeks triple damages. Exact damage figures were not specified in the suit, and a lawyer for the retailers was not immediately available for comment.
The suit claimed AstraZeneca’s strategy has forced the retailers to pay artificially inflated, monopoly prices for the branded version of the drug, known generically as omeprazole. Nexium is also known as esomeprazole.
The lawsuit says AstraZeneca has maintained 70 percent share of the market and blames exclusionary tactics that it says inhibited the sale of generic and over-the-counter competitors.
