A federal judge in Boston has certified two nationwide classes and set the stage for two more trials in the massive, multidistrict wholesale drug pricing case against AstraZeneca and Bristol-Myers Squibb Co. The case alleges that the companies published fraudulently-inflated average wholesale drug prices. Their fraudulent conduct caused consumers and insurance companies to pay higher prices for branded and generic drugs used to treat serious illnesses like cancer and HIV. In an order, U.S. District Judge Patti Saris of the District of Massachusetts ruled that there would be a trial for each of the two classes and that each class period would range from January 1, 1991, to January 1, 2005.
The first class, or the so-called Medigap Class, includes third-party payors who made reimbursements for Medicare Part B covered drugs based on average wholesale prices. The second class includes consumer or third-party payors who paid for certain physician-administered drugs made by AstraZeneca or Bristol-Myers. The second class also includes all third-party payors whose reimbursements contracts were based on the published wholesale prices.
Judge Saris cited the court’s lengthy experience with the issues in the case when explaining her decision to allow national certification. The order recognized how complex the drug reimbursement system is. Several parts of the case have gone to trial or settled. Following a trial last November, the court ordered AstraZeneca and Bristol-Myers to pay nearly $14 million to insurance companies and consumers in Massachusetts. In March, 11 pharmaceutical companies and subsidiaries settled claims against them for $125 million. The agreement followed AstraZeneca’s May 2007 settlement of claims brought by Medicare Part B Zoladex users for $24 million and GlaxoSmithKline’s $70 million settlement in August 2006.
The fraudulent conduct of the pharmaceutical industry has hurt consumers and taxpayers and has resulted in a great deal of litigation across the country. Hopefully Congress will take action next year to clean up this industry and make the regulatory laws much stronger. We have learned over the past several years – as the result of information gained in litigation – that this industry is extremely powerful politically. I believe with a new president and new Congress consumers and the states will begin to see some meaningful changes that will lessen the power of “Big Pharma.”
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