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BY OUR PHARMA CORRESPONDENT 13th
August, 2005:A settlement has been reached
between the state and Dey Pharmaceuticals Inc. Dey,
along with six other pharmaceutical firms, had
been sued for allegedly artificially inflating the
average wholesale price of pharmaceuticals,
Connecticut's Attorney General’s office announced.
In cases where AWP prices for drugs are inflated,
healthcare providers could increase their profits
by prescribing or dispensing drugs from those
companies because of the greater difference
between the prices they paid for the drugs and the
price the state reimbursed. Additionally, the
price inflation increased pharmaceutical
companies' market shares.
Under the terms of the agreement, Dey has agreed
to pay the state US$1.7 million and donate
US$800,000 worth of pharmaceuticals to be used at
free clinics. The US$1.7 million would be divided
amongst state and federal medical assistance
programmes, and would also cover the state's
costs. The US$800,000 worth of pharmaceuticals
comprises 404,296 vials of DuoNeb, Dey's
proprietary albuterol sulphate and ipratropium
bromide product; 709,488 vials of albuterol; and
1,574,307 vials of ipratropium bromide.
The donated pharmaceuticals will be distributed to
certain community healthcare clinics which operate
under the auspices of Connecticut's Department of
Public Health, as well as the AmeriCares Free
Clinics in Norwalk, Danbury and Bridgeport. The
drugs will be available to the clinics over three
years, the Attorney General's office noted.
Commenting on the settlement, Dey noted the net
amount of cash paid to Connecticut after legal
fees and money remitted to the federal government
is US$900,000. As part of the settlement,
Connecticut acknowledged that the settlement did
not constitute an admission of fault or liability
by Dey or its affiliates.
The company had consistently participated legally
and ethically within national and state
reimbursement systems. And it believed the systems
to be seriously flawed, the Dey release noted.
The lawsuits against the other six defendants:
Schering-Plough, GlaxoSmithKline, Aventis, Roxane
Laboratories, Warrick Pharmaceuticals and
Pharmacia. The Attorney General's office said.
The California based Dey, Inc. develops,
manufactures and markets prescription drug
products for the treatment of respiratory diseases
and related allergies. The company manufactures
sterile, unit dose inhalation solution products,
manufactured using aseptic form-fill-seal
technology. Products of the company is marketed to
large institutional purchasers, wholesalers, group
purchasing organizations, chain pharmacies, health
maintenance organizations and home health care
organizations. During the year, the company
transferred the assets and certain liabilities of
its hypothyroid product business at book value to
a newly-formed entity, EM Pharma, Inc. In June
1998, the company has changed its name from Dey
Laboratories, Inc. The shares of the company is
100% owned by Lipha Americas, Inc. before April
1999. After offering to public Lipha America will
hold 84% of the company's shares. The company
incurred $170,000 towards year 2000 expenses till
March 1999.
BY OUR PHARMA CORRESPONDENT |
