[Ip-health] Abbott Labs & others settle case filed by consumers and insurance cos for inflating prices

[Sarah Rimmington]

Abbott, Others Agree For $125 Mln Settlement In AWP Litigation - Update
[ABT]
http://www.rttnews.com/sp/breakingnews.asp?date=03/07/2008&item=179&vid=0

3/7/2008 7:21:28 PM Healthcare companies Abbott Laboratories (ABT) and
Watson Pharmaceuticals (WPI), together with nine leading pharmaceutical
companies, Friday agreed to pay nationwide damages of $125 million in
the Average Wholesale Price or AWC case filed by consumers and insurance
companies. The litigation filed in 2002 alleged the companies of
deliberately inflating the average wholesale prices of certain
prescription drugs.

As a result of the inaccurate reporting of the average wholesale prices
of drugs, consumers and third party payors ended up paying more than
what is required for the prescription drugs. The average wholesale
prices were reported to set the drug price for consumers and insurance
companies paying for Medicare.

As per the settlement, which involves both branded and generic drugs
indicated for the treatment of cancer, HIV and other serious illnesses,
82.5% of the damages will be designated for third-party payors' and the
balance goes to consumer claims.

Customers, who reimbursed any portion of an insured's Medicare Part B
co-payment between January 1, 1991 and January 1, 2005 or those who made
reimbursements outside of Medicare Part B from January 1, 1991 to March
1, 2008, will be eligible for the settlement. Eligible Medicare Part B
recipients will be informed the procedures of the claim, said the company.

Earlier in 2006, in a similar settlement with regard to average
wholesale prices, GlaxoSmithKline agreed for a nationwide $70 million
settlement and in May 2007 AstraZeneca agreed for a $24 million
settlement to Medicare Part B Zoladex users nationwide. In November
2007, AstraZeneca and Bristol-Myers Squibb were fined with $14 million
to be paid to insurance companies and consumers in Massachusetts.

ABT is trading at $51.04, down $1.05 or 2.02%, on 7 million shares.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/