In re Pharmaceutical Indust. Average Wholesale, M.D.L. 1456.
| Decision Date | 24 February 2004 |
| Docket Number | No. M.D.L. 1456.,CIV. A. No. 01-12257-PBS.,M.D.L. 1456. |
| Parties | In re PHARMACEUTICAL INDUSTRY AVERAGE WHOLESALE PRICE LITIGATION |
| Court | U.S. District Court — District of Massachusetts |
Jeffrey B. Aaronson, Bell, Boyd & Lloyd, Chicago, IL, for Baxter International, Inc., Defendant.
Daniel F. Attridge, Kirkland & Ellis, Washington, DC, for B. Braun Medical Inc., Defendant.
Gary L. Azorsky, Berger & Montague, PC, Philadelphia, PA, for Ven-A-Care of the Florida Keys, Inc., Plaintiff.
Jason E. Baranski, Morgan Lewis & Bockius, LLP, Philadelphia, PA, for Pharmacia & Upjohn, Inc., Pharmacia Corp., Defendants.
Steven F. Barley, Hogan & Hartson, LLP, Baltimore, MD, for Amgen Inc., Defendant.
Rebecca Bedwell-Coll, Mascone, Emblidge & Quadra, San Francisco, CA, for Constance Thompson, John B. Rice, Plaintiffs.
Mark A. Berman, Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P.C., Newark, NJ, for Berlax Laboratories, Inc., Reliant Pharmaceauticals, LLC, Defendants.
Steve W. Berman, Hagens & Berman, Seattle, WA, for State of Nevada, State of Montana, Plaintiffs.
David J. Bershad, Milberg Weiss Ber3had Hynes & Lerach LLP, New York City, for Citizens for Consumer Justice, Colorado Progressive Coalition, Congress of California Seniors, Florida Alliance for Retired Americans, Health Care For All, Massachusetts Senior Action Council, Masspirg, Minnesota Senior Federation, New Jersey Citizen Action, New York State Wide Senior Action Council, Pennsylvania Alliance For Retired Americans, Vermont Public Interest Research Group, West Virginia Citizen Action, Wisconsin Citizen Action, Citizen Action of New York, Connecticut Citizen Action Group, Gray Panthers of Sacramento, Health Action of New Mexico, Maine Consumers for Affordable Health Care, North Carolina Fair Share, Oregon Health Action Campaign, Oregon State Public Interest Research Group, United Senior Action of Indiana, Inc., Betty Sicher, Jack Douglas, Joan S. Lee, John Bennett, Pearl Munic, Sue Miles, Plaintiffs.
Jack B. Blumenfeld, Morris, Nichols, Arsht, & Tunnell, Wilmington, DE, for Astrazeneca PLC, Consolidated Defendant.
Thomas L. Boeder, Perkins Cole, Seattle, WA, for Immunex Corp., Defendant.
Anthony Bolognese, Bolognese & Associates, Philadelphia, PA, for United Food & Commercial Workers Unions and Employers Midest Health Benefits Fund, Consolidated Plaintiff.
James J. Breen, Breen Law firm, Alpharetta, GA, for Ven-A-Care of the Florida Keys, Inc., Plaintiff.
Douglas S. Brooks, Kelly, Libby & Hoopes, PC, Boston, MA, for Amgen Inc., Defendant.
Nicole Y. Brumsted, Lieff Cabraser Heimann & Bernstein, LLP, Boston, MA, for Citizens for Consumer Justice, Colorado Progressive Coalition, Congress of California Seniors, Florida Alliance for Retired Americans, Health Care For All, Massachusetts Senior Action Council, Masspirg, Minnesota Senior Federation, New Jersey Citizen Action, New York State Wide Senior Action Council, Pennsylvania Alliance For Retired Americans, Vermont Public Interest Research Group, West Virginia Citizen Action, Wisconsin Citizen Action, Plaintiffs.
Michael M. Buchman, Milbert, Weiss, Bershad, Hynes & Lerach, LLP, New York City, for Colorado Progressive Coalition, Congress of California Seniors, Florida Alliance for Retired Americans, Health Care For All, Massachusetts Senior Action Council, Masspirg, Minnesota Senior Federation, New Jersey Citizen Action, New York State Wide Senior Action Council, Pennsylvania Alliance For Retired Americans, Vermont Public Interest Research Group, West Virginia Citizen Action, Wisconsin Citizen Action, Citizens for Consumer Justice, Citizen Action of New York, Connecticut Citizen Action Group, Gray Panthers of Sacramento, Health Action of New Mexico, Maine Consumers for Affordable Health Care, North Carolina Fair Share, Oregon Health Action Campaign, Oregon State Public Interest Research Group, United Senior Action of Indiana, Inc., Betty Sicher, Jack Douglas, Joan S. Lee, John Bennett, Pearl Munic, Sue Miles, Plaintiffs.
James C. Burling, Hale & Dorr, LLP, Boston, MA, for American Home Products Corp., Biogen, Inc., Defendants.
David J. Burman, Perkins Coie, Seattle, WA, for Immunex Corp., Defendant.
Evan Dean Buxner, Chicago, IL, for All Plaintiffs, Plaintiff.
Tod S. Cashin, Buchanan Ingersoll, PC, Princeton, NJ, for Aventis Behring LLC, Consolidated Defendant.
Ronald L. Castle, Arent,Fox, Kintner,Plotkin,Plotkin & Kahn, LLC, Washington, DC, for Chiron, Defendant.
William F. Cavanaugh, Jr., Patterson, Belknap, Webb & Tyler LLP, New York City, for Centocor, Inc., Johnson & Johnson, Ortho Biotech Products, L.P., Consolidated Defendants.
David J. Cerveny, Hale & Dorr, LLP, Boston, MA, for Novartis Pharmaceuticals, Defendant.
Joanne M. Cicala, Kirby McInerncy & Squire, New York City, for Suffolk County (N.Y.), Plaintiff.
Daniel J. Cloherty, Dwyer & Collora LLP, Boston, MA, for Bristol-Myers Squibb Company, Oncology Therapeutics Network Corp., Defendants.
Jonathan D. Cohen, Greenberg Traurig, LLP, Boston, MA, for Mylan Laboratories, Inc., Defendant.
Jeremy P. Cole, Jones, Day, Reavis & Pogue, Chicago, IL, for Abbott Laboratories, Defendant.
Christopher R. Cook, Jones Day, Washington, DC, for Abbott Laboratories, Defendant.
Michael R. Costa, Greenberg Traurig, LLP, Boston, MA, for Mylan Laboratories, Inc., Defendant.
William M. Cowan, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, for Eli Lilly and Company, Defendant.
Jonathan W. Cuneo, Cuneo Law Group, Washington, DC, for Shirley Geller, Consolidated Plaintiff.
Christopher J. Cunio, Cooley, Manion, & Jones, LLP, Boston, MA, for ICN Pharmaceuticals, Inc., Defendant.
Joseph Danis, The David Danis Law Firm, P.C., St. Loius, MO, for Citizen Action of New York, Connecticut Citizen Action Group, Gray Panthers of Sacramento, Health Action of New Mexico, Maine Consumers for Affordable Health Care, North Carolina Fair Share, Oregon Health Action Campaign, Oregon State Public Interest Research Group, United Senior Action of Indiana, Inc., Betty Sicher, Jack Douglas, Joan S. Lee, John Bennett, Pearl Munic, Sue Miles, All Plaintiffs, Plaintiffs.
William A. Davis, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Washington, DC, for Eli Lilly and Company, Defendant.
Michael DeMarco, Kirkpatrick & Lockhart, LLP, Boston, MA, for Aventis Pharmacy, Defendant.
Merle M. Delancey, Jr., Dickstein Shapiro Morin & Oshinsky LLP, Washington, DC, for Baxter International, Inc., Defendant.
Jeanne E. Demers, Kirkpatrick & Lockhart, LLP, Boston, MA, for Aventis Pharmacy, Defendant.
John C. Dodds, Morgan Lewis & Boskius, LLP, Philadelphia, PA, for Pharmacia & Upjohn, Inc., Pharmacia Corp., Defendants.
Alan J. Droste, Pillsbury Winthrop, Costa Mesa, CA, for Gensia Sicor Pharmaceuticals, Inc., Defendant.
Dennis M. Duggan, Jr., Nixon Peabody, LLP, Boston, MA, for Alpha Therapeutic Corporation, Defendant.
Kimberly A. Dunne, Sidley Austin Brown & Wood, Los Angeles, CA, for Baxter Pharmaceutical Products, Inc., Consolidated Defendant.
Thomas E. Dwyer, Jr., Dwyer & Collora, LLP, Boston, MA, for Bristol-Myors Squibb Company, Defendant.
In this massive proposed class action, Plaintiffs allege that forty-two pharmaceutical companies fraudulently overstate the published "average wholesale prices" ("AWP") of many of their prescription drugs, which results in inflated payments for such drugs by consumers and beneficiaries of the federal Medicare Part B program (through co-payments), private health and welfare plans, health insurers, self-insured employers and other end-payors for prescription drugs.1 They have identified 321 drugs with allegedly inflated prices.
On May 13, 2003, the Court allowed in part a motion to dismiss the original master consolidated complaint. See In re Pharm. Indust. Average Wholesale Price Litig., 263 F.Supp.2d 172, 178-80 (D.Mass.2003) (Saris, J.) (Pharm. I). The Court assumes close familiarity with that opinion, which sets forth the factual background of the allegations as well as the appropriate legal standards. In response to that opinion, Plaintiffs have filed a 297-page amended master consolidated complaint ("AMCC"), which asserts violations of the federal racketeering statute, eleven consumer fraud statutes and the antitrust laws.2 Again, the Defendant pharmaceutical manufacturer companies move to dismiss.
After hearing, the Court ALLOWS IN PART and DENIES IN PART the motion to dismiss the claims that the pharmaceutical companies violated the Racketeer Influenced and Corrupt Organizations Act ("RICO") and antitrust law. Among other things, the Court holds that Plaintiffs have set forth sufficient facts to state claims concerning: (1) the alleged RICO enterprises between the pharmaceutical manufacturers and four pharmacy benefit managers ("PBM's") with the common objective of promoting fraudulent AWP's; (2) the alleged price-fixing conspiracy of the Together Card Program Defendants in violation of the antitrust laws; and (3) RICO claims involving multi-source drugs.
Plaintiffs allege three primary paradigms that accomplish this fraud. First, Plaintiffs allege that each Defendant artificially raises its published AWP's to benefit medical providers (like doctors). The "spread" between the actual cost of the drug and the AWP encourages providers to use that Defendant's drugs at the expense of the beneficiaries of Medicare Part B who make co-payments.3 Second, Plaintiffs allege that each Defendant increases AWP's and provides other fraudulent kickbacks, discounts and rebates to encourage pharmacy benefit managers to put its drugs on their formularies. Third, Plaintiffs allege that certain Defendant manufacturers participate in an antitrust and RICO conspiracy through a discount drug program, the Together Rx Program. The Defendants use this program to "raise, fix, maintain and/or...
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