TAP Pharmaceutical Agrees to $150 Million Settlement
Dec. 2–TAP Pharmaceutical Products has agreed to pay $150 million to consumers and private insurers to settle claims they overpaid for its drug Lupron because the company artificially inflated the price.
The preliminary settlement, revealed yesterday by attorneys for the consumers, comes three years after the Illinois company agreed to pay the government $885 million to resolve criminal and civil charges that it overcharged for Lupron and used government money to bribe doctors to prescribe it.
The agreement “represents the final chapter to the Lupron debacle,” said Thomas M. Sobol of Boston, the lead attorney in the class action lawsuit filed in federal court in Boston in May 2001. “It affords restitution to the real victims of the TAP scheme.”
The money will be divided among hundreds of thousands of patients nationwide and thousands of healthcare plans, Sobol said. About $55 million will go to the health plans, $55 million to other third-party payors — including employers — and about $40 million to consumers, according to the settlement agreement. Individuals will get a minimum of $100, but many could receive thousands of dollars.
The money will mostly reimburse consumers for copayments they made for the drug that cost up to $500 per dose.
The drug is primarily used to treat prostate cancer, but is also prescribed for endometriosis in women and premature puberty in children.
Many of those taking the drug for cancer were covered by Medicare because the drug was injected while the patient was in the doctor’s office. Those on Medicare were required to pay 20 percent of the cost using their own money or private insurance.
US District Court Judge Richard G. Stearns gave preliminary approval to the settlement last week. Final approval is expected in the spring after consumers and insurers have a chance to comment on the settlement and decide whether they want to accept payment or pursue separate lawsuits.
Anyone who purchased the drug after Jan. 1, 1985, may be eligible for part of the settlement funds, Sobol said. Patients who are eligible will be notified by mail and will have to present proof that they used the drug, such as a prescription or a receipt from a copayment.
The suit, consolidated with similar cases from around the country, alleged that the company overcharged consumers millions of dollars and gave doctors illegal incentives to prescribe Lupron instead of a less-expensive drug.
The company does not admit any wrongdoing in the settlement.
In a statement, TAP spokeswoman Katherine Stueland said, “TAP reached the settlement to end a protracted legal battle … TAP has consistently complied with pricing laws and regulations.”
The company did plead guilty in 2001 to participating in a criminal conspiracy by providing doctors with thousands of free samples of Lupron for which the doctors billed Medicare and their patients. Prosecutors alleged that the money from selling the samples, which the doctors kept, amounted to a bribe using government money.
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