Dion G. Rassias, Esquire of The Beasley Firm, LLC recently filed Complaints on behalf of Plumbers’ Local Union No. 690 Health Plan (“Local 690”) and the Delaware Valley Health Care Coalition (“DVHCC”) seeking over $1 billion in damages from several generic drug manufacturers who have increased the prices of generic drugs at alarming rates. Both Complaints show that the plaintiffs purchase or reimburse the cost of prescription drugs for their members, and as a result of the defendant generic drug companies’ “unfair and deceptive acts and practices,” plaintiffs and their members dramatically and drastically overpaid for these medications. These deceptive practices affect many types of healthcare patients including “government assistance patients” (those who are members of one or more government assistance programs which cover all or part of the cost of their generic prescription drugs, including Medicare, Medicaid, and PACE), “private assistance patients” (those who are members of private health insurance plans offered by union funds and other self-funded third party payors for full or the partial payment of their generic prescription drugs), and “no assistance patients” (those who have no health insurance at all for the payment of their generic prescription drugs, and thus have to pay cash for their generic prescription drugs based upon inflated “average wholesale prices” (“AWPs”) for such drugs). These patients, and those that provide them with generic prescription drug benefits, all paid more for generic prescription drugs than they should have paid as a result of the schemes of the defendants.
For example, several defendant drug companies raised their prices for a bottle of 500 tablets of 100 mg each of generic doxycycline hyclate (an antibiotic used to treat a variety of infections) from $20 in October of 2013 to $1,849 in April of 2014. That is an increase of 8,281% in just six months.
This issue is so important that in October of 2014, the United States Congress began to investigate why the prices of some common generic drugs had skyrocketed in recent years. The Senate Subcommittee on Primary Health and Aging and the House Committee on Oversight and Government Reform, through Vermont Senator Bernie Sanders and Maryland Representative Elijah Cummings, began its investigation into the matter and observed during the ensuing congressional hearings that the prices of more than 1,200 generic medications increased an average of more than 448% between July 2013 and July 2014. This is not a coincidence!
In light of the overwhelming evidence of exorbitant price increases by certain generic drug companies, which took place at the same time and in similar amounts, coupled with the refusal of many of these companies to respond to direct government inquiries into the matter, these lawsuits seek to protect consumers and third party payors like the plaintiffs, and to compensate them for the harm already caused.