AstraZeneca's (NYSE:AZN) and Bristol-Myers Squibb (NYSE:BMY) have been ordered to pay double damages in a case over false mark-ups of U. S drug prices through 2003.
U.S District Judge Patti Saris, of Massachusetts District Court, found that the two companies had acted willfully and ordered AstraZeneca to pay more than $12.9 million in damages and Bristol-Myers must pay almost $700,000.
The class action suit stated that drug makers boosted published average wholesale prices which were the basis for reimbursements from Medicare, state governments and private insurers until 2003.
Saris found that the two companies grossly inflated the prices of drugs in a ruling in June. She said that the companies "knew that Medicare beneficiaries, and thus their insurers, were locked by statute into paying twenty-percent of grossly inflated phony AWPs, which bore no relation to any average of wholesale prices in the marketplace."
AstraZeneca released a statement after the ruling stating: "AstraZeneca is disappointed with today's ruling and we intend to appeal. We believe the ruling is unsupported as the conduct at issue was the result of highly competitive conditions in the pharmaceutical marketplace, which led to discounting. The Court's prior ruling on liability is thus profoundly anti- competitive.
AstraZeneca has competed responsibly with respect to pricing and marketing of drugs and we firmly believe that we have acted at all times in accordance with the law.
The plaintiffs are fully aware of AWP pricing and still use AWP as a reimbursement benchmark today. The result of AstraZeneca's conduct in this case was to keep a lower cost product competitive under the Government's reimbursement system, thereby saving Medicare and patients millions of dollars."
Spokesman Tony Plohoros said "Bristol-Myers Squibb has long maintained that it is not responsible for the average wholesale price reimbursement benchmark used by private insurers and medicare, and that its own pricing sales and marketing practices were fair and reasonable."
Both companies intend to appeal the ruling.
[Source: PRNewsWire and Yahoo News]
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