Prescription Drug Companies Fined - Drug Companies Ordered To Pay $13.6 Million In Pricing Suit

As seen in this report

A federal judge has ordered drug companies AstraZeneca and Bristol-Myers Squib to pay a combined $13.6 million in a Massachusetts case that alleged they inflated the so-called "average wholesale price" of expensive, and sometimes life-saving, drugs.

U.S. District Court Judge Patti Saris found that the companies "unfairly and deceptively caused to be published false" average wholesale prices of drugs.

As a result, Saris wrote in a judgment dated Thursday, the companies caused "real injuries to the insurers and the patients who were paying grossly inflated prices for critically important, often life-sustaining drugs."

Bristol-Myers Squib said its pricing was fair and it will appeal.

Saris ordered AstraZeneca to pay $12.9 million and Bristol-Myers Squib to pay $695,594 in damages. Those affected by the ruling include insurers who reimbursed Medicare beneficiaries for their co-insurance, and insurers and consumers who made co-insurance payments based on the average wholesale price.

"Bristol-Myers Squib has long maintained that it is not responsible for the averaage wholesale price reimbursement benchmark used by private insurers and Medicare and that its own pricing, sales and marketing practices were fair and reasonable. The company maintains this position and will appeal this decision," said company spokeman Tony Plohoros.

A call to AstraZeneca was not immediately returned on Friday night.

Saris said she decided to double the damages because the conduct was willful on the part of the companies.

"The defendants well understood the devastating impact the mega-spreads had on old and sick patients required to make co-payments they could ill afford," Saris wrote.

Steve Berman, lead counsel for the plaintiffs, praised the decision. "Judge Saris agreed with our damage estimates and did not pull punches in her characterization of the defendants' actions," he said.

Berman said the court has indicated that plaintiffs could expand this case to a nationwide class action lawsuit. The state class action suit was originally filed in 2002 in U.S. District Court in Massachusetts and named 23 pharmaceutical companies. The original suit represented all people who had taken or paid for any one of 37 named drugs.