Jury Verdict Review & Analysis
www.jvra.com
October 26, 2006

$150,000,000 TOTAL RECOVERY - CLASS ACTION LAWSUIT - PHARMACEUTICAL NEGLIGENCE - ALLEGED FRAUD INVOLVING SCHEME BY PHARMACEUTICAL COMPANY TO INFLATE RETAIL PRICE OF DRUG LUPRON - RICO CLAIMS - VIOLATION OF CONSUMER PROTECTION STATUTES.

County
United States District Court, District of Massachusetts

This was a negligence/consumer fraud action in which the plaintiffs consisting of classes compromised of patients, health care plans and insurers sought damages from the defendants due to an alleged scheme by the defendants to inflate the retail price of the drug Lupron. This matter was certified as a class action by the court.

In this case, the plaintiffs were consumers and third-party payors who purchased or reimbursed claimants for Lupron, an injectible prescription drug used to treat prostate cancer, endometriosis, uterine fibroids, and precocious puberty. The plaintiff's alleged that the defendant pharmaceutical companies were negligent and fraudulent scheme by the defendants involving the marketing, sale and distribution of Lupron®, and that this alleged scheme cause the plaintiffs to overpay for Lupron®.

The plaintiffs maintained that the scheme involved: 1) artificially inflating the average wholesale price so that doctors could charge more for the drug; 2) giving free samples to doctors knowing they would charge patients and insurers for them; and 3) giving valuable gifts to doctors as incentives to prescribe the defendant's drug instead of other less costly alternatives. The plaintiffs alleged that the actions of the defendants were in violation of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) statue as well as a violation of the state Consumer Fraud Act.

The defendants consisted of the pharmaceutical manufacturer and its owners, Abbott Laboratories and Takeda Pharmaceuticals Company. The defendants denied the allegations made by the plaintiffs as to any alleged fraud and further denied that the plaintiffs failed to prove that they suffered any damages which could be attributed to any actions on the part of the defendants.

The parties came to a settlement agreement whereby the defendants agreed to pay the total sum of $150,000,000 to the various members of the classes.

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