Attorney General's News Release

March 28, 2006

Drug company to pay $413,000 to Missouri over concerns it blocked generic competition for Paxil, Nixon announces

Jefferson City, Mo. — The maker of Paxil, a widely prescribed drug used to treat depression, anxiety and obsessive-compulsive disorders, will reimburse the Missouri Medicaid program $413,000 in a proposed settlement with Attorney General Jay Nixon and attorneys general representing 44 other states, the District of Columbia and the U.S. Virgin Islands.

The $14 million nationwide settlement between the attorneys general and GlaxoSmithKline (GSK) will resolve the states' concerns that the company used frivolous litigation to delay the introduction of generic competition to paroxetine hydrochloride, sold by GSK under the name Paxil. As a result of those delays caused by GSK, Medicaid programs across the country paid too much for the drug because a generic equivalent was not available.

"GSK used the courts to hold on to a monopoly for a popular drug, and the end result was that consumers - including Medicaid - paid more than they should have," Nixon said. "This settlement demonstrates that we won't allow pharmaceutical companies to be rewarded for actions that penalize consumers."

Paxil was approved by the Food and Drug Administration in 1992, giving GSK a five-year monopoly under the law for the drug. In 1998, GSK filed the first of several lawsuits for patent infringement against competing drug companies that sought to introduce a generic version of Paxil. The lawsuits triggered automatic extensions of the monopoly; the attorneys general allege the lawsuits were baseless and were primarily intended to preserve GSK's monopoly for Paxil.

The settlement was entered today in federal district court in Pennsylvania for the court's approval. Other users of Paxil previously obtained a class action settlement with GSK in a Pennsylvania case. That settlement, however, excluded Medicaid and other government programs from reimbursement.

Last week, Nixon presented the Missouri Medicaid program with a check for more than $1.2 million from a settlement with King Pharmaceuticals. That settlement resolved allegations that King Pharmaceuticals incorrectly reported prices for its generic drugs, resulting in lower rebates being paid to Medicaid.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818