In re Lorazepam & Clorazepate Antitrust Litigation
Four health insurance plans -- Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of Minnesota, Federated Mutual Insurance Company, and Health Care Service Corporation -- successfully sued generic drug manufacturer Mylan and its suppliers for increasing prices of Mylan's popular anti-anxiety medications, Lorazepam and Clorazepate, and for entering into exclusive supply agreements. The evidence at trial, held in the US District Court for the District of Columbia, showed that in November 1997 Mylan entered into exclusive supply arrangements with Profarmaco, an Italian manufacturer of raw materials for these two drugs, and Gyma Laboratories of America, its US distributor. These arrangements foreclosed the supply of raw materials to Mylan's competitors, allowing Mylan to raise prices of the finished tablets by as much as 2,500%.
Working with the law firms Robins, Kaplan, Miller & Ciresi LLP and Porter Wright Morris & Arthur LLP, counsel to plaintiffs, Analysis Group's expert provided expert testimony on both liability and damages issues. The Analysis Group team was led by Managing Principals Justin McLean and Laurits Christensen, and affiliate Stanley Ornstein.
In assessing liability, our expert defined the relevant product markets, analyzed the economics of vertical restraints, and assessed harm to competition and consumers. He concluded that the defendants' actions had caused antitrust injury in the relevant markets and that the defendants were liable for damages. In measuring damages, he conducted "but-for" analysis, assessing plaintiffs' drug reimbursement costs absent defendants' anticompetitive conduct. The Analysis Group team undertook extensive analyses of plaintiffs' claims data detailing prescription reimbursements for the two drugs over a five-year period.
Our expert calculated damages of $12 million suffered by plaintiffs as a result of Mylan's overcharges. The 12-member federal jury found Mylan liable on all eight antitrust counts, and awarded this damages estimate to the penny. The figure was trebled, because the jury found Mylan's actions to be willful. The decision is currently under appeal.