Under the terms of the settlement, Abbot and Fournier will reimburse the states, and bear the attorneys general's fees and costs from the litigation.
The states have alleged that the two drug makers illegally blocked generic alternatives to the cholesterol-lowering drug Tricor from hitting the market.
They also alleged Abbot and Fournier of violating antitrust law through "product hopping", by filing multiple lawsuits over patent rights in order to delay sales of generic versions of Tricor.
Product Hopping is where the drug makers make small changes to the product, stop promoting older versions of the drug, and manipulate drug codes used to sell cheaper generic versions, in order to maintain a stranglehold on the market.
"They devised a complex scheme that illegally blocked cheaper generic drugs from entering the market," said California Attorney General Edmund G. "Jerry" Brown.
He added that because Abbot and Fournier were preventing generics for coming to market, state and local governments had to pay higher prices for Tricor.