US court doubles AZ and B-MS damages

Following allegations of inflating average wholesale prices - which were the basis of Medicare reimbursements - against pharmaceutical majors earlier this year, Judge Patti Saris of the US District Court of Massachusetts, Boston (Marketletter July 2), has ordered two of the firms, Anglo-Swedish major AstraZeneca and USA-based Bristol-Myers Squibb, to pay double damages.

In the summer, Judge Saris levied damages of nearly $4.5 million against AstraZeneca on behalf of a group of plaintiffs claiming that it had overcharged for Zoladex (goserelin acetate), its treatment for prostate and breast cancers. The judge also ruled that B-MS had overcharged for several of its anticancer drugs and levied damages of $183,454 for one group of plaintiffs. She also ruled that Warrick, a subsidiary of US drug major Schering-Plough, had inflated the price of the asthma drug albuterol sulfate, although she did not double damages against the firm in the latest decision.

In the November 2 ruling, Judge Saris said that the companies had acted wilfully, and ordered AstraZeneca to pay more than $12.9 million in damages and B-MS an amount of $695,594. She declared that the companies "knew that Medicare beneficiaries, and thus their insurers, were locked by statute into paying 20% of grossly-inflated phoney AWPs, which bore no relation to any average of wholesaler prices in the marketplace."