State complaint alleged that in 2004, at the request of insurance broker Marsh & McLennan, Great American submitted a fake and intentionally uncompetitive quote to Norwood based semiconductor manufacturer Analog Devices. Great American submitted this fake bid to make another insurance company’s bid look competitive. In return for this favor, Marsh & McLennan steered another one of Analog Devices? insurance policies to Great American at a pre-determined price. Insurers such as Great American paid Marsh & McLennan lucrative contingent commissions based on the volume of business Marsh & McLennan placed with them. The state sought restitution, civil penalties, injunctive relief and costs. In May 2009, the case settled Under the terms of the settlement, Great American is required to pay $60,000 to Analog Devices and $116,000 to the state. The agreement also requires Great American to undertake conduct reforms aimed at preventing insurance bid rigging in excess casualty insurance. Among other
things, Great American is specifically prohibited from colluding with brokers or other insurance companies to unlawfully fix insurance prices and is required to retain certain records concerning its bidding practices.
34 states filed suit alleging that Warner Chilcott entered into an illegal agreement with Barr Pharmaceuticals to raise the prices of Ovcon, an oral contraceptive. The lawsuit alleged that after Barr Pharmaceuticals publicly announced that it planned to have a generic version of Ovcon on the market by the end of the year, Warner Chilcott paid Barr Pharmaceuticals $1 million for an agreement designed to prevent Barr’s generic product from coming to market. Under the terms of the alleged agreement, once Barr received FDA approval to market generic Ovcon, Warner Chilcott had 90 days to pay Barr $19 million, after which Barr would refuse to bring the cheaper generic version to the market. The lawsuit alleged that as a result of the agreement, Warner Chilcott paid Barr a total of $20 million to keep it from marketing its generic version of Ovcon. In additon to a payment of $5.5 million, the settlement prohibits Warner Chilcott, for ten years, from entering into any agreement that would have the effect of limiting the research, development, manufacture, or sale of a generic alternative to one of its drugs. Furthermore, Warner Chilcott must provide the states notice of certain agreements it has entered into with generic manufacturers, and must continue to make its records available to the states for inspection to determine whether the company is complying with the terms of the agreement.