For Immediate Release
Wednesday, October 09, 2002
Organized Labor Joins Litigation Battle For Fair Drug Prices
AFSCME Joins PAL in Two Lawsuits Targeting Drug Companies for Patent Manipulation
Third-Party Payers Also Join Suit Against Maker of Augmentin,
The Number-One Prescribed Antibiotic
BOSTON, MA —
Looking beyond the prescription drug rhetoric of the campaign season, the American Federation of State, County, and Municipal Employees (AFSCME) and the Prescription Access Litigation (PAL) project today announced that they have joined forces to fight back against the high price of prescription drugs.
With Congressional elections just a month away and the possibility of creating a Medicare drug benefit fading fast on Capitol Hill, AFSCME's decision to join PAL's class-action litigation campaign makes clear that America's working families want action on soaring drug prices-and now see litigation as a necessary tool in that fight, noted AFSCME President Gerald W. McEntee.
"While the pharmaceutical industry is making record profits, many Americans are faced with the very real choice of buying prescription drugs or paying for food and other necessities. Without reform of drug industry pricing practices, millions of seniors and working families will continue to have limited or no access to vital prescription drugs," he said.
AFSCME's move throws the clout of public service and health care workers behind PAL's campaign targeting the illegal drug company practices that keep pharmaceutical prices high and block consumer access to lower-cost generic medicines. PAL coalition director Ahaviah Glaser welcomed the union as a strong voice for working families in the fight for fair drug pricing.
"We are tremendously strengthened by AFSCME's decision to put its 1.4 million members behind this effort. Unreasonably high drug costs are squeezing everyone, even those who have union-negotiated health benefits," she noted. "Third-party payers and group purchasers like AFSCME District Council 47 in Philadelphia are also signing on to PAL's litigation efforts because the real way to cut health costs is to end drug company pricing fraud - not ask workers to pay more."
She noted that another third-party payer, the Association for Health Center-Affiliated Health Plans, a coalition of non-profit health plans, also joined PAL's campaign for fair drug pricing this summer.
In its first action as a member of PAL, AFSCME signed on as a plaintiff in the coalition's two newest class-action lawsuits. Filed in federal court in the Eastern District of Virginia, the first targets Glaxosmithkline and Smithkline Beecham (collectively "GSK") for filing fraudulent patents to illegally extend their patent on Augmentin, forcing consumers to pay artificially inflated prices for the drug, which is the nation's most widely-prescribed antibiotic. In an earlier case brought by two companies seeking to market a generic form of Augmentin, a federal judge ruled that GSK's secondary patents were "invalid."
"The PAL plaintiffs are now charging that GSK used those secondary patents to defraud consumers, who had to pay for the drug-or make co-payments-based on a price far higher than would have otherwise been charged once the original patent expired," said lead PAL attorney Thomas M. Sobol, of Hagens-Berman.
The second case, filed in the United States District Court for the District of Columbia, is a suit against two manufacturers of a generic version of the hypertension drug, Adalat. This case charges that Elan Corporation PLC and Biovail Corporation, the two companies approved by the FDA to each make a generic version, chose to maximize their profits at the public's expense by carefully splitting up the market so that each had its own "mini-monopoly" with no competition from the other.
"The conduct of the drug companies in these cases epitomizes much of what is wrong with the prescription drug industry in the U.S.," said McEntee. "Multinational pharmaceutical manufacturers are engaged in price gouging and endless manipulation of the patent laws. AFSCME has joined this litigation because we believe corporate America must be accountable to America's citizens."
With insurance premiums nationwide set to rise as much as 20 percent next year, many employers want to take more out of paychecks to pay for employee health benefits. Nor is membership in a major union sufficient protection against rising out-of-pocket health costs. CALPERS, the huge California state employee benefit program which includes many union members, says its premiums will go up about 25% next year. It's a crisis that no one seems ready to deal with, said Glaser, neither Congress, the federal government, nor the industry.
"Instead, employers, insurers, and state and local governments want the health care consumer to fix the problem-by paying more," she said. "That's unacceptable. PAL wants to get at the source of the problem. The drug industry has got to be reined in, and we welcome AFSCME's decision to join us in this fight."
PAL has filed 14 sets of lawsuits since it was launched in the spring of 2001 by Community Catalyst, the Boston-based national consumer health advocacy organization. The PAL coalition is comprised of over 85 health advocacy and senior citizen groups in 34 states and the District of Columbia. PAL is jointly led by Community Catalyst and the National Health Law Project (NHeLP).
In addition to AFSCME, and its Philadelphia affiliate, District Council 47, three other PAL member groups are plaintiffs in the Augmentin lawsuit: the Tennessee Health Care Campaign, which has just joined PAL and is a statewide organization working to obtain affordable, accessible, and quality health care for all Tennesseans; Congress of California Seniors, a statewide organization dedicated to improving the lives of the state's seniors and their families; and Maine Consumers for Affordable Health Care, a nonprofit advocacy organization dedicated to helping all Maine people obtain affordable, quality health care.
AFSCME is joined by Health Care For All of Massachusetts, one of the nation's oldest consumer health advocacy groups, in filing the suit against Elan and Biovail for their anti-competitive marketing of generic Adalat.
