Settlement Offer In $l20m Suits

Press, Volume CIX, Issue 31908, 8 February 1969, Page 14

Settlement Offer In $l20m Suits

(N.Z.P.A.-Reuter—Copyright)

NEW YORK, Feb. 7.

Five major drug manufacturers accused of conspiring to fix the price of tetracycline and related anti-biotic drugs have offered to settle anti-trust damage suits brought against them for $l2O million.

The money would go to claimants such as local and State Governments, wholesalers, retailers, hospitals, and individual persons who alleged they were overcharged during a 13-year period when tetracycline, a so-called “wonder drug,” retailed at $1.89 a capsule. Three of the firms—the American Cyanamid Company, Chas. Pfizer and Company, and the Bristol-Myers Company—were convicted by a Federal court jury in Deeember, 1967, of conspiring to fix the price of tetracycline ip violation of United States anti-trust laws. Two others—Squibb Beechnut Inc. and the Upjohn Company—were named as coconspirators, but not as defendants in the criminal suit brought by the Government

The firms are appealing against the conviction. “The companies remain convinced that they have not violated the anti-trust laws,” they said today, in a joint

statement announcing their settlement offer. “The companies have concluded, however,” the statement said, “that it is in the best interests of their stockholders to present a programme to settle the treble damage claims at this time.” “Failure to settle this complex litigation would mean that the companies would be burdened for many years with numerous treble damage suits involving very large claims.”

The statement said that the firms had considered deferring any settlement negotiations until after the appeal against the conviction was heard. “However,” the statement said, “since plaintiffs’ counsel have made it clear that the treble damage litigation would continue, even if the three companies won their appeal, all the companies concluded that further deferring settlement would not serve any useful purpose.” The statement added that while the companies had received no assurances that their offer would be accepted by the litigants, “preliminary informal discussions have indicated that counsels representing a substantial number of the actual and prospective claimants will recommend its acceptance to their clients.”

The sl2om would be provided as follows: —Cyanamid, 40.3 per cent; Pfizer, 34.1 per cent; Bristol-Myers, 16.1 per cent; Upjohn, 5.2 per cent; Squibb, 4.3 per cent