United States District Court Judge, Richard Stearns, has granted preliminary approval of a proposed $150 million settlement between TAP Pharmaceuticals Products Inc. and a nationwide class of consumers and third-party payors who purchased the drug Lupron. Lupron is primarily prescribed to treat prostate cancer in men, endometriosis and uterine fibroids in women, and premature puberty in children.
The lawsuit, consolidating many federal cases in United States District Court for the District of Massachusetts in Boston, charged that TAP Pharmaceutical Products Inc., Abbott Laboratories and Takeda Pharmaceutical Company Ltd. conspired to fraudulently market, sell and distribute Lupron.
The suit claimed that the companies forced consumers to pay inflated prices for the drug by artificially inflating the “Average Wholesale Price” of the drug, giving free samples to doctors knowing they would charge patients and insurers for them, and giving incentives to doctors so that they would prescribe Lupron instead of cheaper alternatives.
TAP Pharmaceuticals previously pled guilty to criminal and civil charges regarding Lupron brought by the U.S. Attorney and eventually paid $875 million in penalties in 2001. But that settlement did not include or compensate private consumers or insurers who were illegally overcharged.
According to Thomas Sobol, co-lead counsel for the plaintiffs and managing partner of the Boston office of Hagens Berman, this proposed settlement gives consumers well-deserved compensation for damages they suffered.
“The settlement will likely provide full compensation to consumers for the overpayments they made for this cancer treatment drug, and affords substantial compensation to the insurers of Lupron patients,” said Sobol. “This litigation sends a message to pharmaceutical companies that they must be ethical in their dealings with customers or they will face legal repercussions.”
Under the proposed settlement, TAP will pay $150 million on behalf of all defendants. After paying $55 million to certain health plans, the remaining $95 million will go to consumers, additional health plans and litigation costs and fees. If the Court gives final approval to the proposed settlement, individual class members will get payments based on the amount of Lupron they purchased. TAP admits no wrongdoing in the settlement.
“This settlement is an enormous victory for everyone who was illegally overcharged for Lupron. Consumers will get 100 cents on the dollar for their damages,” said Alex Sugerman-Brozan, director of the Prescription Access Litigation Project (PAL). “This is the high-water mark for drug pricing cases, and is the result of aggressive consumer participation in the case.” PAL is a nationwide coalition of over 100 consumer organizations that is involved in over 20 class action lawsuits on drug price issues.
The class includes all persons or entities that purchased any formulation of the drug Lupron from Jan. 1, 1985 until at least Dec. 31, 2004, perhaps later. Class members will be notified of their eligibility and will be given the option to file a settlement claim or exclude themselves from the suit by the end of the class period, March 31, 2005.
Class members can also find additional information on the Lupron settlement at www.lupronclaims.com.
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