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Wall Street Journal reports on $350 Million settlements with McKesson, FirstDatabank

Posted Jun 11 2009 6:28pm

Deadline for claims in July 9, 2009!
The Wall Street Journal today reported on the three settlements resulting from PAL member lawsuits against drug wholesaler McKesson Corporation, and publishers First DataBank and MediSpan. (See article here.) One of these settlements allows for claims by consumers and insurers who paid for any one of these 386 drugs, as described below. With the claims deadline of July 9, 2009, there are only four weeks left to file a claim.

In November 2008, a federal court in Boston gave preliminary approval for a proposed $350 settlement in a class action lawsuit called New England Carpenters Health Benefits Fund, et al. v. First Databank, Inc. and McKesson Corporation. The settlement is schedule for a final approval hearing on July 23, 2009 in federal District Court in Boston.

Background on the settlement:
In November 2008, a federal court in Boston gave preliminary approval for a proposed $350 settlement in a class action lawsuit called New England Carpenters Health Benefits Fund, et al. v. First Databank, Inc. and McKesson Corporation. Final approval of the settlement is scheduled for July 23, 2009 in Massachusetts federal District Court in Boston.

What the lawsuit is about:
The class action lawsuit alleged that two companies, a drug wholesaler (McKesson Corporation) and a publisher of drug data (First Databank) wrongfully inflated the mark-up factor used by the wholesaler to determine the Average Wholesale Price (“AWP”) for hundreds of brand-name drugs. The AWP is the benchmark used by insurers and government programs to reimburse pharmacies. The lawsuit alleged that the defendants artificially inflated the AWP while keeping the actual cost of the drug low so that pharmacies, many of whom were customers of McKesson, received a larger return. It is estimated that this practice cost consumers, insurers, and Medicaid programs over $7 billion in excess costs between 2001 and 2008. You can read more on this case in an article in the Wall Street Journal, or in our earlier blogs ( Two landmark settlements to roll back drug prices!; Unions in PAL Coalition win $350 Million settlement in McKesson class action ).

McKesson agreed to pay $350 million to settle the lawsuit against it. Insurers and eligible consumers who purchased any of the 386 prescription drugs during the class period may be eligible to receive a portion of the settlement. The drugs included in the settlement include some of the top selling drugs in the United States, such as Adderall, Advair, Allegra, Ambien, Celebrex, Clarinex, Claritin, Coumadin, Levaquin, Lipitor, Nasonex, Nexium Ortho Tri-Cyclen, Plavix, Prevacid, Prilosec, Protonix, Prozac, Risperdal, Seroquel, Topamax, Valium, Valtrex, Zantac, Zoloft, Zyprexa, and many more. A full list of the drugs involved in the settlement is available on our website here or at the settlement website here.

The agreement designates approximately $20,900,000 to settle claims of consumers who paid percentage co-pays and $40,425,000 to settle claims of consumers who paid the cash price of the drugs subject to the lawsuit. The amount consumers will receive depends on the number of claims filed and the amount of the claims. Perhaps most importantly for consumers, an additional settlement with publishers MediSpan and First DataBank includes a 4% price rollback of these 386 drugs. Set to take effect in late September, this rollback could save an estimated $1 billion in future drug costs in its first year.

Consumers may file a claim:
• If you paid a percentage co-payment for any drugs on the list between August 1, 2001 and March 15, 2005. (A percentage co-payment is a co-payment that varies, depending on the cost of the drug. You may not file a claim if you made only flat or fixed dollar co-payments or if you were not obligated to make a co-payment. A flat co-payment is one that is the same cost, usually $5 or $10, no matter how much the drug costs your insurance company.

or

• If you paid the full price for any of the drugs on the list between August 1, 2001 and January 23, 2009.

Any claim you file must be post-marked by JULY 9, 2009!

More details about the settlement, claim forms, and information on how to file a claim can be found at www.McKessonAWPSettlement.com. You can also call toll-free: 1-877-625-9414, or email info@McKessonAWPSettlement.com.

Prescription Access Litigation (PAL) is grateful to the participation of our coalition members AFSCME District Council 37, New England Regional Carpenters/New England Carpenters Benefit Funds, and by three other union or retiree benefit funds, who were instrumental in bringing this important lawsuit on behalf of consumers and insurers nationwide.

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