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Hagens Berman Sobol Shapiro: Judge Orders Double Damages, Issues Stinging Rebuke in Average Wholesale Price Case

Court action could set path for future, national litigation.

BOSTON, Nov. 2 /PRNewswire/ -- Today a U.S. District Court Judge awarded consumers millions of dollars in damages against drug giants AstraZeneca (NYSE: AZN) and Bristol-Myers Squib (NYSE: BMY) for the companies' role in unfair trade practices involving the pricing of drugs in an important state case that could have major implications in future litigation.

On June 21, 2007, Judge Patti Saris ruled that AstraZeneca and Bristol-Myers Squibb grossly inflated the prices of a number of expensive physician-administered drugs, and today ordered the companies pay nearly $14 million, including a doubling of some damages against both defendants.

"We are absolutely ecstatic about Judge Saris' ruling today," said Steve Berman, managing partner of Hagens Berman Sobol Shapiro and lead counsel for the plaintiffs. "Judge Saris agreed with our damage estimates and did not pull punches in her characterization of the defendants' actions."

In her 30-page order, Judge Saris said "the defendants well understood the devastating impact the mega-spreads had on old and sick patients required to make co-payments they could ill afford."

The two classes affected by today's ruling include third-party payors in Massachusetts that reimbursed Medicare beneficiaries for their statutory twenty percent coinsurance, and all third-party payors and consumers in Massachusetts who made coinsurance payments based on AWP.

Judge Saris goes on to point out AstraZeneca's actions in creating mega-spreads for prescription drug prices were "clearcut" and concluded that "the damage to sick and old beneficiaries inevitable."

"I find that BMS's conduct was willful and knowing when less than ten percent of its sales were made within five percent of the list price, and the spreads where huge. In these situations, BMS knew that the published wholesale list price was not an accurate price and was deceptive and unfair," Saris states in her ruling.

"Justice has served, but only in part. We have more work to do," Berman said. "The court has invited plaintiffs to expand this case to a nationwide class action for the next trial, potentially giving consumers across the country the same remedies this state case affords."

To date AWP plaintiffs have been awarded hundreds of millions of dollars in settlements and verdicts, including a $70 million settlement from GlaxoSmithKline, one of the major defendants, which came in August 2006 removing them from this litigation. In the proposed settlement agreement, 30 percent of the $70 million settlement will go to consumers who incurred co-payments based on AWP for a list of specific Medicare Part B covered drugs manufactured by GSK. The remaining 70 percent will go to third-party payers including health plans, HMOs and other organizations who purchased certain GSK drugs.

The "Average Wholesale Price," or AWP, is a benchmark figure reported by drug manufacturers which health plans, government health programs such as Medicaid and other "third party payors" use to determine co-pays and physician reimbursements, among other uses.

The AWP class action suit was originally filed in 2002 in U.S. District Court in Massachusetts. The original complaint names 23 pharmaceutical companies including many of the U.S.'s major drug manufacturers, AstraZeneca, Bristol-Meyers Squibb, GlaxoSmithKline and Johnson & Johnson. The original suit represents all people who have taken or paid for any one of 37 named drugs in the original filing.

About Hagens Berman Sobol Shapiro

Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it has developed a nationally recognized practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a $300 million settlement in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS served as counsel in a $850 million Washington Public Power Supply settlement and represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit


Steve Berman (206) 623-7292 Mark Firmani (206) 443-9357

Hagens Berman Sobol Shapiro Firmani + Associates Inc.

SOURCE Hagens Berman Sobol Shapiro
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