Lieff Cabraser Heimann & Bernstein, LLP

Drug Makers Under Pressure; Public Anger Over Prices Helps Fuel a Tide of Lawsuits

From Main Street to Capitol Hill, prescription-drug buyers have a blunt message for the pharmaceutical industry: They're sick of rising prices. And their remedy is turning into a legal headache for drug makers. Citizen groups, state governments and federal regulators are piling on with lawsuits reminiscent of the initial legal challenges that confronted the tobacco industry in the 1990s.

Bristol-Myers Squibb Co. has been sued by 29 state attorneys general, who accuse the firm of using several fraudulent tactics to keep generic versions of its cancer-fighting drug Taxol off the market. Another lawsuit accuses Astra-Zeneca PLC and Barr Laboratories of colluding to block a generic version of another cancer treatment, Tamoxifen.

Bayer Corp. has been hit with a lawsuit over its antibiotic Cipro. And several employees of Schering-Plough Corp. have been subpoenaed to appear before a federal grand jury in Philadelphia, apparently over drug pricing. The industry's trade group, the Pharmaceutical Research and Manufacturers of America, has had little to say about the legal offensive.

By any measure, Americans are spending a lot on prescription medications. The total hit $ 154.5 billion last year, according to the National Institute for Health Care Management. That sum -- which excludes, for example, drugs dispensed by hospitals -- is up from $ 78.9 billion in 1997.

The lawsuits filed so far charge that the brand-name drug companies have unlawfully blocked the introduction of generic drugs. In some cases, they contend that the pharmaceutical manufacturers have paid generic-drug companies to keep their less costly products off the market.