TAP Pharmaceuticals Reaches $150M Settlement Over Alleged Price Inflation
Attorneys for Illinois-based TAP Pharmaceutical Products on Wednesday in a preliminary statement announced an agreement to pay $150 million to settle price inflation allegations made in a 2001 lawsuit, the Boston Globe reports. According to the lawsuit, TAP overcharged consumers and health insurers millions of dollars for the prostate cancer medication Lupron and provided physicians with illegal incentives to prescribe the medication -- which can cost as much as $500 per dose -- rather than less-expensive treatments. The lawsuit was consolidated with similar cases in other states. TAP officials have not admitted wrongdoing in the case (Dembner, Boston Globe, 12/2). In October 2001, officials for TAP, a joint venture between Abbott Laboratories and Takeda Chemical Industries, reached an agreement with the U.S. attorney's office in Boston to pay $875 million to settle allegations that the company inflated prices and paid kickbacks to physicians to prescribe Lupron and helped physicians charge the government for free samples of the medication. In July, eight former and current TAP sales executives were acquitted of charges that they violated the Prescription Drug Marketing Act during the 1990s. Prosecutors had alleged that TAP officials provided kickbacks, junkets and bribes to six hospitals, two health plans, 26 group practices and 25 individual physicians (Kaiser Daily Health Policy Report, 7/15).
Settlement Details
Under the settlement announced on Wednesday, TAP agreed to pay $55 million to health plans; $55 million to third-party payers, such as employers; and $40 million to consumers who were affected by the alleged inflated Lupron prices, the Globe reports. Consumers who purchased Lupron after Jan. 1, 1985, can participate in the settlement. Consumers who can prove that they took Lupron -- either through receipts or prescriptions for the medication -- will receive a minimum of $100 and could receive thousands of dollars to help offset the cost of copayments made for the treatment. U.S. District Judge Richard Stearns last week offered preliminary approval for the settlement, with final approval expected next spring after a comment period for affected health insurers and consumers.
Reaction
Thomas Sobel, lead federal prosecutor in the case, said that the settlement "represents the final chapter in the Lupron debacle" and "affords restitution to the real victims of the TAP scheme." TAP spokesperson Katherine Stueland said that the company "has consistently complied with pricing laws and regulations" and agreed to the settlement "to end a protracted legal battle" (Boston Globe, 12/2).
