May. 09, 2006
Appeals court: Drug lawsuit can proceed
MADISON, Wis. - A state appeals court on Tuesday reinstated a class-action lawsuit accusing Bayer Corp. of blocking generic versions of an antibiotic.
The court cited a state Supreme Court case that changed the definitions of Wisconsin's antitrust statutes.
A Milwaukee County judge dismissed the lawsuit three years ago. He ruled Wisconsin's antitrust laws applied only to commerce within the state, while the lawsuit involved transactions between states.
But the 1st District Court of Appeals reversed that ruling. The state Supreme Court ruled last year the state's antitrust laws can apply to interstate commerce - if the alleged conduct "substantially affects" the people of Wisconsin, the appeals court ruling said.
A group of Wisconsin residents filed the lawsuit in 2000 against Bayer and Barr Laboratories. The suit stems from a 1997 patent settlement between Bayer and Barr over production of the antibiotic Cipro.
Bayer held a patent on Cipro that was issued in 1987 and expired in 2004. Barr asked the federal Food and Drug Administration in 1991 for permission to market a generic form of Cipro, contending Bayer's patent was invalid and unenforceable, according to court records.
Bayer sued Barr in New York state. The two sides reached a settlement in 1997.
Barr agreed not to market generic Cipro while Bayer's patent was in effect. In exchange, Bayer agreed to pay Barr settlement payments, which eventually totaled $398 million, court records said.
The Wisconsin lawsuit alleges Bayer executed an illegal agreement under Wisconsin antitrust law. The deal eliminated any generic competition for Cipro, resulting in inflated prices for consumers, the lawsuit said.
Barr officials said about 38 class-action complaints alleging antitrust violations arising from the settlement were filed in state and federal court by Cipro consumers in 2000. All the federal complaints were consolidated in federal court in New York. U.S. District Judge David Trager in March 2005 granted summary judgment in the companies' favor.