Definitely a Cause of Anxiety
Prices of some prescription drugs have been rising at an alarming rate in a year when the costs of many other products are holding or falling. Most consumer complaints to the Federal Trade Commission cited astronomical price hikes of two widely used, generic versions of anti-anxiety medications. On Tuesday the agency accused Mylan Laboratories Inc., the nation’s second-largest producer of generic drugs, of conspiring with its suppliers to create a monopoly in lorazepam and clorazepate and raising prices of the drugs by up to a staggering 3,000%.
Ten states joined the federal government’s suit, which seeks $120 million in damages from Mylan and its suppliers on behalf of consumers. California was not one of them, an oversight that should be rectified by Gov.-elect Gray Davis and Atty. Gen.-elect Bill Lockyer. Separately, private class action suits were filed in Florida and California earlier this month.
The FTC accused Mylan and the others of using illegal agreements to eliminate competition. The company allegedly cornered the supply of the raw ingredients used to make the drugs through an exclusive contract last year with the supplier. The FTC alleges that after locking up the supply of the raw ingredients, Mylan boosted prices.
The agency said the wholesale price of lorazepam, the generic version of Ativan, rose from $7.30 for a 500-tablet bottle to $190. The price for clorazepate, the generic for Tranxene, rose from $11.36 to $377 for a bottle of 500, the FTC said.
The issue of illegality lies in the way Mylan allegedly sought to squeeze out competitors to raise prices. Mylan denies the allegations and maintains that even with the increased prices for the two drugs, consumers are paying significantly less for the generics than for the name-brand equivalents.
Is that supposed to be consolation for consumers who need and use the generics? This price explosion sounds like market manipulation, plain and simple. The FTC has gone to court on behalf of consumers. California should add its heft to the federal suit.
