Class-Action Suits Against Drug Makers Rising
The Los Angeles Times on Saturday examined the growing trend of class-action lawyers taking on pharmaceutical companies over alleged pricing improprieties, a movement that is increasing as drug makers are "fast becoming the health care industry's new Public Enemy No. 1." In recent weeks, several lawsuits have been filed against drug makers seeking class-action status over allegations that the companies illegally blocked competition of drugs and "unfairly inflated prices." While "there is no assurance that any of the cases will be accepted as class actions," the movement against drug companies is similar to the one that ultimately resulted in the $246 billion national tobacco settlement, as plaintiffs' attorneys are "working in tandem" with "activist state attorneys general." The consumer groups and companies involved in these suits are represented by many lawyers who are "veterans of tobacco litigation and other high-profile class-action lawsuits." The "potential payoff" for these lawsuits could be in the "millions" for plaintiffs, in addition to the sums that attorneys general may seek for Medicaid reimbursements. This "potential bonanza," the Times reports, has led to some "unusual alliances, uniting consumer organizations and their longtime adversaries, health insurers, against" drug makers. Marsha Cohen, a University of California-Hastings School of Law professor, said that the groups joining up against drug companies "learned from tobacco," adding, "As more parties join the suit, the more expensive it is to fight it." Recent actions taken against drug makers include:
- In the "latest salvo in the drug wars," the Prescription Access Litigation Project, or PAL, last week followed up on an FTC complaint and filed suit accusing Schering-Plough and two other drug makers of "conspiring to prop up the price of potassium supplement K-Dur20."
- In addition, PAL and Stop Patient Abuse Now, an organization with 35 members, have filed separate suits against Bristol-Myers Squibb for "allegedly manipulating the price" of BuSpar, an anti-anxiety drug.
- Aetna, Blue Cross, Albertson's supermarket and 14 state attorneys general are plaintiffs in a suit alleging that Aventis SA and Andrx "conspired to block the introduction of a low-cost generic" of the blood pressure medication Cardizem CD.
The Times reports that "[a]nalysts believe the pharmaceutical business can withstand" the coming wave of lawsuits. But Michael Criden, a member of a law firm that represents HIP Health Plan of Florida in drug-pricing suits, said the industry may have a long battle ahead of it. "It is now just a free-for-all. ... You are going to see a flood of actions," he said (Gellene, Los Angeles Times, 6/9).
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