Drug & Device News

With New Notification Scheme, Settlement Payout May Be Higher

AstraZeneca Pharmaceuticals has agreed to pay $103 million to settle the multidistrict litigation that claimed it and other drug companies inflated the published average wholesale prices that the government and other third-party payers use to set drug company reimbursement rates. The amounts it will actually pay to consumers are expected to be higher than in most similar past settlements because of a clause in the agreement that calls for the third-party payers, like insurance companies, to provide a settlement administrator with information about payments made by insurance policy holders. This will allow for notification to those eligible to make claims, rather than simply an unfocused public notification. Wells Wilkinson, director of the Prescription Access Litigation project at Community Catalyst Inc., which was involved in negotiating the claims administration process for the settlement, said, “Typically, one of the hardest things to do is to identify consumers who can participate in the settlement.” Jennifer Fountain Connolly, Of Counsel to the Washington office of the plaintiff's law firm Hagens Berman Sobol Shapiro, says a similar notification plan was used in the $350 million settlement of New England Carpenters Health Benefits Fund, et al. v. McKesson Corp., a case that also involved claims of inflation of average wholesale prices of drugs. “That was the first time we used the same mechanism, and it greatly increased the claims rate,” Connolly said. “It multiplies by several factors the number of consumers who make claims.”

FDA Fines Red Cross for Failing to Comply with Blood Safety Regulations

The American Red Cross was fined over $16 million by the FDA in June because of a history of failures to comply with federal laws concerning the collection and manufacture of blood products, such as plasma and platelets. The fine for the Red Cross's mismanagement of blood products was set at $9.79 million, while the remaining $6.39 million in fines was levied against the group for failure to follow Good Manufacturing Practices. The Red Cross's problems in this area go back a long way: Past lapses compelled the Red Cross to enter into a consent decree with the federal government in 1993 requiring it to improve its safety standards in order to ensure the safety of the country's blood supply. In 2003 the consent decree was amended to allow the FDA to impose fines for failure to comply with agency regulations. In announcing these latest fines, the FDA made clear that the Red Cross's violations have not, as far as the agency knows, created contaminated blood supplies or caused any harm to recipients of the affected blood products.

With New Notification Scheme, Settlement Payout May Be Higher

AstraZeneca Pharmaceuticals has agreed to pay $103 million to settle the multidistrict litigation that claimed it and other drug companies inflated the published average wholesale prices that the government and other third-party payers use to set drug company reimbursement rates. The amounts it will actually pay to consumers are expected to be higher than in most similar past settlements because of a clause in the agreement that calls for the third-party payers, like insurance companies, to provide a settlement administrator with information about payments made by insurance policy holders. This will allow for notification to those eligible to make claims, rather than simply an unfocused public notification. Wells Wilkinson, director of the Prescription Access Litigation project at Community Catalyst Inc., which was involved in negotiating the claims administration process for the settlement, said, “Typically, one of the hardest things to do is to identify consumers who can participate in the settlement.” Jennifer Fountain Connolly, Of Counsel to the Washington office of the plaintiff's law firm Hagens Berman Sobol Shapiro, says a similar notification plan was used in the $350 million settlement of New England Carpenters Health Benefits Fund, et al. v. McKesson Corp., a case that also involved claims of inflation of average wholesale prices of drugs. “That was the first time we used the same mechanism, and it greatly increased the claims rate,” Connolly said. “It multiplies by several factors the number of consumers who make claims.”

FDA Fines Red Cross for Failing to Comply with Blood Safety Regulations

The American Red Cross was fined over $16 million by the FDA in June because of a history of failures to comply with federal laws concerning the collection and manufacture of blood products, such as plasma and platelets. The fine for the Red Cross's mismanagement of blood products was set at $9.79 million, while the remaining $6.39 million in fines was levied against the group for failure to follow Good Manufacturing Practices. The Red Cross's problems in this area go back a long way: Past lapses compelled the Red Cross to enter into a consent decree with the federal government in 1993 requiring it to improve its safety standards in order to ensure the safety of the country's blood supply. In 2003 the consent decree was amended to allow the FDA to impose fines for failure to comply with agency regulations. In announcing these latest fines, the FDA made clear that the Red Cross's violations have not, as far as the agency knows, created contaminated blood supplies or caused any harm to recipients of the affected blood products.