Within the corporate world of pharmaceuticals, pricing of products is an issue that is constantly under scrutiny. According to recent securities filings made by Express Scripts, two potentially large lawsuits have been lodged against the company. In the pricing lawsuits, plaintiffs claim a subsidiary of Express Scripts, United Biosource, assisted drugmakers in marketing their products using methods that violated federal antitrust and anti-kickback laws.
According to information contained in the pricing lawsuits, plaintiffs describe how United Biosource allegedly had a conflict of interest in promoting certain drugs that were considered to be high-priced pharmaceuticals. The conflict supposedly arose due to United Biosource’s pharmacy benefit management program, which was put in place to keep drug prices as low as possible. And along with United Biosource, other companies named as defendants in the lawsuit include Eli Lilly & Co., Mallinckrodt, and Laboratory Corporation of America.
Based on the first lawsuit, plaintiffs allege Mallinckrodt engaged in price gouging that adversely affected numerous health insurers who covered patients through Medicare Advantage policies. The class-action suit, filed in Los Angeles federal district court, claims Mallinckrodt eliminated a rival company that produced the drug Acthar Gel, used to treat multiple sclerosis. Because of this, plaintiffs state the drug’s price rose from $40 per vial a decade ago to more than $34,000 today. However, Mallinckrodt denies any wrongdoing, stating no anti-trust or anti-kickback laws were violated.
The second lawsuit, filed in Texarkana federal district court, has the National Healthcare Analysis Group named as the plaintiff. In the suit, NHAG states that based on information from confidential sources, Eli Lilly worked in conjunction with doctors to get them to write more prescriptions for Humalog insulin and Forteo, a treatment for osteoporosis. In exchange for the additional prescriptions, NHAG alleges Express Scripts was hired to do administrative work for the doctors, and also supplied free nursing services to the doctors through a privately-held staffing firm. As for damages sought, the lawsuit is seeking treble damages based on violations of the federal anti-kickback statute and state and federal False Claims Acts. However, as with the first lawsuit, Express Scripts denies any wrongdoing.
Private Plaintiff Lawsuits
Along with lawsuits filed by states and various companies, a variety of private plaintiff lawsuits have also been filed regarding these issues. For example, the same plaintiffs who filed a lawsuit against Mallinckrodt have also filed a price-fixing class action suit against Eli Lilly as well as other insulin makers Sanofi-Adventis and Novo Nordisk. And in similar filings, private plaintiffs have filed whistleblower suits against Amgen, AmerisourceBergen, Bayer, and Gilead Sciences, all of which are subsidiaries of Eli Lilly. Filed in response to the federal government’s decline to join them in class action suits, the private plaintiffs allege the company persuaded doctors to prescribe Humalog and Forteo in exchange for administrative and nursing services provided free of charge. But as with the other lawsuits, Eli Lilly maintains no wrongdoing has taken place.
Because they maintain no wrongdoing has occurred, the drug companies named as defendants in these lawsuits have stated they plan a vigorous defense to prove their innocence. But because the cases have just been unsealed, the discovery process and other legal motions and filings are in their early stages. Based on the complexity of these cases, it’s expected it may be months or possibly years before they are finally resolved. However, since both sides believe they are in the right regarding the laws pertaining to these cases, legal experts feel many aspects of these cases will be closely examined by all parties before any future verdicts are reached.
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