Public Employee Press

Union busts crooked drug firms
$24 million hit on producer of useless AIDS drug

An AIDS drug manufacturer paid out $24 million in September to settle a lawsuit brought by DC 37 and a nationwide coalition of union and community health-care advocacy groups.

“This was a horrible case of a drug company taking advantage of our most vulnerable members by pushing a drug that was largely ineffective,” said Audrey Browne, director of regulatory compliance of the DC 37 Health and Security Plan.

Browne served as settlement attorney for the benefit plans in the class-action suit against manufacturers EMD Serono and Merck Serono International.

Serono produced Serostim, a growth hormone used to treat AIDS wasting, a condition in which people with the HIV virus suffer profound weight loss.

The DC 37 plan worked on the case with a number of other union benefit plans, which filed the suit after Serono escaped federal criminal action in 2005 by agreeing to pay $175 million in fines. The U.S. Justice Dept. had charged Serono with fraudulent marketing, since in most cases the drug is useless against AIDS wasting. The government said Serono promoted Serostim — at $12,000 for a standard 12-week supply — for unapproved treatments and took doctors on junkets to encourage them to prescribe it.

The lawsuit aimed to force Serono to reimburse patients and prescription drug plans for their spending on the drug.

The DC 37 plan got about $62,000 under the settlement, plus legal fees and other costs. Because of privacy rules, the union cannot provide details about members and retirees affected by the settlement.

“The success of our lawsuit sends a message that prescription plans like ours will look out for members’ interests by holding drug firms accountable for their illegal activity,” said Cynthia Chin-Marshall, administrator of the union plan.