Friday, Aug. 18, 2006 | 9:08 a.m.
Nevadans will see some money from pricing lawsuits filed against drug companies four years ago after a major litigant in the cases reached a $70 million proposed settlement agreement with the state.
GlaxoSmithKline (GSK) was among more than a dozen defendants in two almost identical lawsuits that claimed companies inflated the average wholesale price of drugs. The AWP is the benchmark for most prescription drug sales in the country.
The proposed agreement sets aside 30 percent of the money for consumers who incurred co-payments based on the AWP for a list of Medicare Part B-covered drugs manufactured by the company.
It will refund class members for excess payments for drugs and will guarantee a minimum payment of $100. The GSK drugs covered include Zofran, Kytril, Alkeran, Imitrex, Lanoxin, Myleran, Navelbine, Retrovir, Ventolin, Zovirax and Zantac.
Tim Terry, director of the Medicaid Fraud Control Unit in the Nevada attorney general's office, says the state is still working out the details for consumer reimbursement.
"There will probably be a Web site set up where people can download a claim form," he said. "They will, of course, have to provide some sort of proof that they used the products."
Once details are finalized, the state will notify consumers through the attorney general's Web site and local media outlets.
Most of the rest of the money from the settlement will go to third-party payers such as health plans, HMOs and other organizations that purchased the drugs.
A portion of the money will go to legal fees, Terry said, but there will be more than enough to settle all anticipated individual claims.
Many of the drugs covered by the settlement are used to treat cancer and other serious illnesses and, as Terry pointed out, the lawsuit probably has outlived some individual members of the class.
The settlement, if approved by the court, releases GSK from any further action by the state.
Although GSK was the first company to settle and is a major manufacturer, it is not the only high-profile pharmaceutical company named in the suit. Other defendants include AstraZeneca and Bristol-Myers Squibb.
The amount of the alleged overcharges varies greatly. For example, the difference in the cost of a respiratory medicine was estimated at 25 cents per dose, while the price of one antibiotic was allegedly inflated by more than $60.
Terry said the settlement with GSK, when coupled with factors such as pending trial dates, could spur other defendants to reach an accord with the state: "I don't have the sense that they are all going to march into the office next week and settle. We're glad we could settle with (GSK), and we hope there is an opportunity to do the same with others."
For its role in leading the litigation, the state will also split $2.5 million with the other states involved: Connecticut, Montana, Arizona and New York.
Terry said that under the consumer protection act, money the state receives will go into the Medicaid fraud fund.
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