Public Employee Press

H&S wins drug lawsuit

A drug manufacturer has agreed to pay $24 million to settle a class action lawsuit brought by DC 37 Health & Security Plan.

The suit charged that the manufacturer used phony prescription criteria in improperly promoting its AIDS medication Serostim. The settlement will provide cash back to prescription drug plans and individuals who paid for the drug.

Serostim is approved by the federal Food and Drug Administration for the treatment of patients with AIDS wasting, the severe weight loss experienced by many with the illness. The suit charged that the manufacturer promoted Serostim for purposes not approved by the FDA. There is no claim that Serostim is unsafe.

The lawsuit stemmed from a 2005 agreement by Serono Laboratories, Inc. to pay $704 million in fines and restitution after a federal criminal investigation revealed that nearly 85 percent of prescriptions written for Serostim were not medically necessary. The suit charged that Serono marketed the drug for unapproved uses and promoted it by providing junkets for physicans. The 2005 agreement repaid federal and state health-care programs, but did not compensate private benefit plans, such as DC 37’s, or individuals.

“This case cried out for justice,” DC 37 Executive Director Lillian Roberts said. “Vulnerable members who could ill afford the co-pays were harmed economically, as was our benefits plan.” According to plan Administrator Rosaria R. Esperon, a typical 12-week treatment of Serostim cost the Plan $21,000.

The settlement applies nationwide to both private health plans that covered the costs of Serostim and individuals who paid the full amount or a copay.

In February, a federal court in Massachusetts gave preliminary approval to the settlement, but it must still conduct a “fairness hearing” before final approval is ordered. The period covered by the settlement is July 1995 to the end of 2006.

To file a claim, call 1-800-378-3615, or visit www.SerostimSettlement.com. The DC 37 Health and Security Plan is researching these claims and will announce when it is able to provide information to affected individuals.

— GNH