Eleven Defendants Settle in Average Wholesale Price Litigation
BOSTON – Today eleven major pharmaceutical companies, including Abbott Laboratories (NYSE: ABT) and Watson Pharmaceuticals (NYSE: WPI), agreed to a $125 million nationwide settlement in the average wholesale price (AWP) litigation filed in 2002 by consumers and insurance companies, which claimed the defendants intentionally inflated reports of the average wholesale prices on certain prescription drugs.
The published AWP is used to set the price that consumers making Medicare Part B co-payments and Medicare pay for the drug, as well as insurance companies and other third-party payors. The lawsuit contends that consumers and third-party payors paid more than they should because of the drug companies' false AWP reporting.
Seattle-based Hagens Berman, co-lead counsel in the case, announced today's settlement which includes branded and generic drugs used primarily in the treatment of cancer, HIV and other serious illnesses. Under the terms of the settlement 82.5 percent of the settlement fund is designated for third-party payors' claims and the remaining 17.5 percent is designated for consumer claims.
"This is a very good settlement for third-party payors and consumers," said Steve Berman, Hagens Berman managing partner. "The battle isn't over yet, but every settlement signifies that our claims are just and these drug companies have many years of damage to repay to drug purchasers."
The defendants included in today's settlement are Abbott Laboratories, Amgen Inc., Aventis Pharmaceuticals Inc., Hoechst Marion Roussel, Baxter Healthcare Corp., Baxter International Inc., Bayer Corporation, Dey, Inc., Fujisawa Healthcare, Inc., Fujisawa USA, Inc., Immunex Corporation, Pharmacia Corporation, Pharmacia & Upjohn LLC, Sicor, Inc., Gensia, Inc., Gensia Sicor Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc., and ZLB Behring, L.L.C.
Drugs covered in this settlement include Aranesp, Epogen, Neupogen, Neulasta, Anzemet, Ferrlecit and Infed.
Medicare Part B recipients eligible to participate in the settlement will receive a mailing outlining claim procedures. The class includes anyone who reimbursed any portion of an insured's Medicare Part B co-payment between Jan. 1, 1991 through Jan. 1, 2005 or those who made reimbursements outside of Medicare Part B for any of the named drugs from Jan 1, 1991 through March 1, 2008. The court will hold a final hearing to approve all settlement details.
Other settlements in the AWP case came in August of 2006 when GlaxoSmithKline agreed to a nationwide $70 million settlement and May of 2007 when AstraZeneca agreed to a $24 million settlement to Medicare Part B Zoladex users nationwide. After a trial, the court in November 2007 ordered AstraZeneca and Bristol-Myers Squibb to pay nearly $14 million to insurance companies and consumers in Massachusetts for the companies' roles in unfair trade practices.
The court is expected to set a trial date for remaining claims against AstraZeneca and BMS on behalf of insurance companies and consumers outside of Massachusetts.
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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in ten cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.