Judge Patti Saris today issued an order rejecting nearly every argument made by the defendants in the average wholesale price (AWP) litigation against the pharmaceutical industry.

The ruling upheld nine of the ten counts of illegal corporate behavior contained in the plaintiffs' complaint, and let stand charges against all but one of the drug companies charged.

Earlier the court appointed Hagens Berman co-lead counsel in the case, and Hagens Berman attorneys Steve Berman and Tom Sobol argued against the recent motion to dismiss the case.

The suit targets the companies' practice of illegally inflating the AWP of their drugs, published in several independent publications from information provided by the drug manufacturers. Medicare, Medicaid and third party payers, such as insurance companies, reimburse pharmacies and physicians for drugs they provide based on the AWP. Individual patients also pay out-of-pocket on this basis.

According to the order, "Defendants have conceded that AWP's represent only an 'undiscounted sticker price' that has no direct relation to the actual average price they charge for their drugs and that this is a widespread pricing and reporting practice." (Order p. 14).

In particular, the order refused to dismiss two of the complaint's major allegations. The order let stand the allegation of an ongoing conspiracy between the drug manufacturers and Pharmacy Benefit Managers (PBMs), who profit from the 'spread' between the discounted price they pay and the AWP for which they are reimbursed by patients and other payers.

Second, the order refused to dismiss the claim of a conspiracy among the eight pharmaceutical companies that sponsor the 'Together Rx' prescription drug discount card. The Together Rx Card is designed to provide discounts on certain brand-name prescription drugs to Medicare recipients who do not have prescription drug coverage through any other source. Plaintiffs charge that, in order to pay for the discounts the card would offer on certain drugs, the eight companies acted in concert to raise the AWPs of the drugs.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in 10 cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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