Drugs: The $120 Million Settlement

Five leading drugmakers swallowed a bitter pill last week. In a surprise move, they offered to pay $120 million to settle treble-damage claims against them for allegedly rigging the price of a widely used antibiotic, tetracycline. While proposing the settlement, the five companies—American Cyanamid, Chas. Pfizer, Bristol-Myers, Upjohn and Squibb Beech-Nut—asserted that they "have not violated the antitrust laws."

In 1967, a federal jury convicted Cyanamid, Pfizer and Bristol-Myers of plotting to fix the price of tetracycline—and the companies are still appealing the verdict. Upjohn and Squibb were named co-conspirators but not defendants. Encouraged by the verdict, 39 states, ten...