US court orders AstraZeneca, Bristol-Myers Squibb to pay double damages over inflated pricing

A US district court judge in Boston ordered AstraZeneca to pay $12.9 million and Bristol-Myers Squibb $695 594 over allegations that the companies inflated the average wholesale prices (AWPs) of certain drugs. The drugmakers plan to appeal the order, which followed a ruling by the court in June that they were guilty of "unfair and deceptive trade practices" in the case.

"I conclude that defendants' conduct was both knowing and wilful because they knew that Medicare beneficiaries, and thus their insurers, were locked by statute into paying 20 percent of grossly inflated AWPs, which bore no relation to any average of wholesale prices in the marketplace,'' Judge Patti Saris stated in an order posted to the court's website. The judge added that the companies caused "real injuries to the insurers and the patients who were paying grossly inflated prices for critically important, often life-sustaining drugs."

Saris added that she doubled the size of both damage awards because the companies' conduct was wilful. However, the judge did not order Schering-Plough, which was also found guilty of overcharging in the case, to pay any damages because the company's "unfair and deceptive conduct'' caused no harm in the class of drugs involved.

In response to the ruling, spokesperson Laura Hortas of Bristol-Myers Squibb stated that the company "has long maintained that it is not responsible for the average wholesale price reimbursement benchmark used by private insurers and Medicare and that its own pricing, sales and marketing practices were fair and reasonable.'' AstraZeneca's Laura Woodin added that the company believes "the ruling is unsupported as the conduct at issue was the result of highly competitive conditions in the pharmaceutical marketplace, which led to discounting. The court's prior ruling on liability is thus profoundly anti-competitive.''

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