Federal agency accuses Mylan of monopoly tactics

The federal government has charged Mylan Laboratories with attempting to create a monopoly within the pharmaceutical industry.

The Federal Trade Commission launched a $120 million lawsuit against Mylan - the agency's largest antitrust case in history - charging that the company conspired to cut off competition through an exclusive deal with a supplier.

At the core of the FTC's grievance is an agreement that Mylan struck with Profarmaco, an ingredient supplier based in Italy. In late 1997, Profarmaco agreed to sell active ingredients for the anti-anxiety drugs lorazepam and clorazepate to Mylan only. As a result of the agreement, the FTC charged, the company created a virtual monopoly.

Mylan denied that it did anything wrong, and said the agency's decision was "radical, rushed and wrong." The company maintains that the agreement's only intention was to ensure an adequate and uninterrupted source of ingredients.

The civil lawsuit seeks $120 million to refund consumers who were forced to pay dramatically higher prices for medicines due to the monopoly. According to the government, after Mylan and Profarmaco reached their agreement, prices for a 500-tablet bottle of clorazepate jumped to $377 - 33 times the previous price of $11.36. Prices for a 500-bottle of lorazepam, meanwhile, rose from $7.30 to $190.

Profarmaco, its parent company Cambrex Corp. and its U.S. distributor Gyma Laboratories are being sued alongside Mylan. PR