Lawyers are demanding that AstraZeneca, the UK's second-largest pharmaceuticals company, pay hundreds of millions of dollars in damages after a court found it had run a six-year scam to inflate drug prices for patients and company health insurance schemes.
The ruling by a Boston court reopens an issue AstraZeneca had believed settled in 2004 when it pleaded guilty and agreed to pay $355m (£178m) to end criminal and civil charges that it overcharged the US government for a prostate cancer drug.
Yesterday, in what was described by the victorious attorney in a class action lawsuit as a "test case" that will be copied across the other 49 states, AstraZeneca and two other drug companies were found liable for the extra costs piled on to patients and health insurers in Massachusetts as a result of a scheme to keep up the average wholesale price (AWP) of numerous drugs.
AstraZeneca, Bristol-Myers Squibb and Schering-Plough all sold drugs to doctors at steep discounts, but encouraged them to say they had paid a higher wholesale price when they claimed reimbursement from Medicare. Doctors could pocket the difference and the companies kept the AWP at an artificially high price.
The mark-up from the discounted price to the AWP ranged from 28 per cent to 1,131 per cent. According to court documents, a sales representative for AstraZeneca pitching its prostate cancer drug Zoladex was blunt about the benefits to doctors of the mark-up. "Do the math!" he wrote in a letter to a group of urologists in Arizona.
The legal victory will benefit the company health insurance schemes and the uninsured individual patients who paid for drugs at prices based on the AWP. Steven Berman, lead attorney for the plaintiffs, said the liabilities of AstraZeneca alone could run into hundreds of millions of dollars.
He has until 1 August to file a claim for damages.
More at The Independent
The ruling by a Boston court reopens an issue AstraZeneca had believed settled in 2004 when it pleaded guilty and agreed to pay $355m (£178m) to end criminal and civil charges that it overcharged the US government for a prostate cancer drug.
Yesterday, in what was described by the victorious attorney in a class action lawsuit as a "test case" that will be copied across the other 49 states, AstraZeneca and two other drug companies were found liable for the extra costs piled on to patients and health insurers in Massachusetts as a result of a scheme to keep up the average wholesale price (AWP) of numerous drugs.
AstraZeneca, Bristol-Myers Squibb and Schering-Plough all sold drugs to doctors at steep discounts, but encouraged them to say they had paid a higher wholesale price when they claimed reimbursement from Medicare. Doctors could pocket the difference and the companies kept the AWP at an artificially high price.
The mark-up from the discounted price to the AWP ranged from 28 per cent to 1,131 per cent. According to court documents, a sales representative for AstraZeneca pitching its prostate cancer drug Zoladex was blunt about the benefits to doctors of the mark-up. "Do the math!" he wrote in a letter to a group of urologists in Arizona.
The legal victory will benefit the company health insurance schemes and the uninsured individual patients who paid for drugs at prices based on the AWP. Steven Berman, lead attorney for the plaintiffs, said the liabilities of AstraZeneca alone could run into hundreds of millions of dollars.
He has until 1 August to file a claim for damages.
More at The Independent
2 comments:
Scams in health care industry always makes me feel sad...cause how can they play with someone suffering from health problem its just shame....
SHZ.
Self Help Zone
FYI, I posted a less perjorative analysis of this ruling on my blog:
http://www.drugchannels.net/2007/06/comments-on-awp-decision.html
Adam
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