Homework answers / question archive / ALBANY, NY, Jan

ALBANY, NY, Jan

Economics

Share With

ALBANY, NY, Jan. 27-Two drug companies have agreed to pay $80 million

to settle allegations that they conspired to keep a cheaper, generic version of a blood pressure medication off the market.Under the settlement announced today, Aventis Pharmaceuticals Inc. and Andrx Corp. will pay that amount to states, insurance companies, and consumers nationwide.Consumers paid too much for the drugs Cardizem CD and its generic equivalents because the companies conspired to delay the marketing of cheaper competitors, said New York state Attorney General Eliot L. Spitzer.Spitzer said that in 1998, the German pharmaceutical giant Hoechst-which merged with Rhone-Poulenc in 1999 to form Aventis-paid Andrx just under $100 million to not market a generic form of Cardizem CD for 11 months. The agreement was to be renewed annually, he said.This "most craven form of anticompetitive behavior" kept the drug financially out of the reach of countless people, Spitzer said.Consumer groups have said that Cardizem sales total about $700 million a year domestically. Users of Cardizem were paying about $73 a month for the drug when a generic cost about $32 a month.- Michael GormleySource: Associated Press, January 28, 2003. Used with permission of The Associated Press. Copyright © 2003. All rights reserved.


How much profit per year per user might the producers of Cardizem have been making if their average total costs were equal to $55 a month?------per year per user