Updated from 1:35 p.m. EDT
Six European and Japanese pharmaceuticals companies will pay close to $255 million to settle charges they fixed the price of vitamins and violated state and federal antitrust laws, state attorneys general announced Tuesday.
The settlement is the largest ever received under state laws that allow consumers and business to recover damages for price-fixing overcharges -- even though the consumers and businesses did not buy directly from the defendants. Federal antitrust law does not permit these "indirect purchasers" to recover damages, while the 23 participating jurisdictions permit such recovery.
The class-action suit was brought by 21 states, along with Puerto Rico and the District of Columbia.
Under the settlement, the manufacturers will pay $225 million to compensate consumers and businesses for the higher prices they paid for vitamins.
In addition, in a separate agreement, the manufacturers will pay more than $29 million to compensate state governments and the governments of the District of Columbia and Puerto Rico for overcharges on governmental vitamin purchases. All 50 states will receive compensation for overcharges state government purchases of products containing vitamins, while businesses and consumers in the 23 participating jurisdictions will also receive damage awards.
The companies settling the case are Switzerland-based
, as well as three Japanese companies,
Takeda Chemical Industries
The settlements must be approved by the 21 state courts and by courts in Puerto Rico and the District of Columbia. The settlements cover numerous pending private class action suits as well as suits brought by the state attorneys general on behalf of consumers and businesses within their states.
"We are sending a clear message that we will stand together to fight price-fixing whether our foes are here or abroad," said Jim Ryan, Illinois attorney general, in a statement.
The case dates to the mid-1990s, when the
began investigating allegations that Japanese and European pharmaceuticals companies were meeting clandestinely to carve up the worldwide vitamin market and fix prices. The companies themselves dubbed the operation Vitamins Inc.
"Vitamins Inc., as the cartel called itself, met secretly all over the globe to scheme how it would illegally fix prices on the food we buy to feed our families," said Christine Gregoire, Washington state attorney general, in a statement. "They conspired on how much product each company would produce, how much they would charge, and which customers they would sell to." Washington recovered $10.8 million under the settlement.
She said the actions of the drug companies resulted in consumers paying higher prices for groceries.
Tuesday's announcement by the states follows a settlement reached at the federal level on behalf of companies that bought vitamins in bulk from the defendants
In March, a federal judge approved a settlement that awarded $242 million to companies that had purchased bulk vitamins from the defendants. The award was considerably less than the original settlement of $1.05 billion announced last November because some of the largest companies involved, such as
, pulled out to pursue claims of their own.
These companies also pleaded guilty to criminal charges brought by the Department of Justice and paid a total of $862 million in fines.