Pfizer has reached a settlement agreement under which it will pay $93 million in compensation. The agreement aims to resolve a lawsuit brought against the company, which alleged unfair and malicious business practices to the detriment of customers and competitors.
Pfizer, notable for its fame as one of the major beneficiaries of the Covid epidemic, became the subject of an antitrust lawsuit filed by pharmacy networks – the American Rochester Drug Co-Operative, Inc., and the Puerto Rican Drogueria Betances LLC.
The dispute stemmed from the cholesterol drug Lipitor, manufactured by Pfizer. This drug proved to be a gold mine for the company – generating $130 billion in revenue over 14 years of sales. These figures indicate a real market demand, which attracted other interested parties after Pfizer's patents expired.
However, Pfizer didn't want anyone to compete with them on this matter. The mentioned pharmacies accuse Pfizer of colluding with the Indian pharmaceutical company Ranbaxy Laboratories. As part of this collusion, Pfizer allegedly influenced Ranbaxy to continuously delay the introduction of its own generic (and accordingly cheaper) version of the cholesterol drug.
The companies were supposed to engage in a simulated legal battle over patents, which served as a pretext for continuously delaying the release of the competitive drug. To achieve this, Pfizer was purportedly paying Ranbaxy enough to discourage them from proceeding. Of course, this was at the expense of customers and distributors without competitive options.
According to Pfizer's statement, the company does not admit guilt and does not believe it did anything illegal. However, it states that the settlement is fair and reasonable. This inevitably raises the question – why pay if the company is so convinced it's in the right...?
Notably, by settling, Pfizer throws its alleged co-conspirator, Ranbaxy Laboratories, to the wolves, as the terms of the settlement do not cover them. The distributors' lawsuit, which has been ongoing for the past 10 years, also involves Ranbaxy.
The settlement still awaits approval by a federal judge in Trenton, New Jersey. If approved, one-third of the compensation amount, around $31 million, will go to the lawyers of both parties as legal fees. However, no mechanisms for compensating patients forced to pay inflated prices have been foreseen.
15.02.2024
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