4 Rivals Bribed FDA, Mylan Labs Suit Says

Mylan Laboratories has filed suit against four of its competitors, alleging that they damaged its business by bribing federal officials for preferential treatment in the generic drug business.

The suit, filed Thursday in U.S. District Court in Washington, claims that the competitors violated federal antitrust and racketeering laws resulting in about $200 million in damages.

The competitors named in the suit include AKZO NV, a Dutch concern; Par Pharmaceuticals Inc. of Spring Valley, N.Y.; Vitarine Pharmaceuticals of Springfield Gardens, N.Y., and American Therapeutics of Bohemia, N.Y.

Also named were various officers, employees and agents of those firms and an AKZO subsidiary, Pharmaceutical Basics Inc., and a subsidiary of Par, Quad Pharmaceuticals.

“What we’re saying is that the payment of bribes in order to change the way the regulatory process functioned resulted in earlier approvals” of drugs for Mylan’s competitors, said Mike Forscey, a Washington-based attorney for Mylan.

Greg Drahuschak, an analyst with Butcher & Singer in Pittsburgh, said that even at $200 million, damages would be worth $5.55 per share to Mylan, an amount he estimated would be equal to the company’s pretax profits for the past 13 years.

Determining damages for lost business opportunities has proven difficult in other suits, he noted.

Par spokeswoman Barbara Manners said the company will “vigorously defend itself” but declined to respond to the specific charges.

Officials of AKZO and Vitarine declined comment.