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Drug Makers Pay

Boston, MA: (Mar-08-08) A lawsuit was filed by consumers and insurance companies against nine leading pharmaceutical companies, including healthcare companies Abbott Laboratories (ABT) and Watson Pharmaceuticals (WPI), over the Average Wholesale Price or AWC of certain prescription drugs. The suit, filed in 2002, claimed that the companies deliberately inflated the average wholesale prices of the 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 part of a settlement agreement reached in the case, sources stated that healthcare companies Abbott Laboratories (ABT) and Watson Pharmaceuticals (WPI), and the other nine leading pharmaceutical companies, agreed to pay nationwide damages of $125 million to resolve allegations.

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 Jan. 1, 1991 and Jan. 1, 2005 or those who made reimbursements outside of Medicare Part B from Jan. 1, 1991 to Mar. 1, 2008, will be eligible for the settlement. Eligible Medicare Part B recipients will be informed the procedures of the claim. [RTT NEWS: ABBOTT, OTHERS AGREE TO $125 MILLION SETTLEMENT]

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Published on Mar-10-08


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