Lawsuit Settlement Could Save U.S. Consumers $4 Billion on Drugs

[Omaha Steve]

http://blog.aflcio.org/2006/10/31/lawsuit-settlement-could-save-consumers-4-billion-on-drugs/

Lawsuit Settlement Could Save U.S. Consumers $4 Billion on Drugs

by James Parks, Oct 31, 2006

A tentative settlement in a class-action suit could end up saving American consumers as much as $4 billion next year when they go to buy brand-name drugs at their local drugstores.

The settlement would end a prescription drug price-fixing scheme that costs union members and others billions of dollars annually. Says Lillian Roberts, executive director of AFSCME District Council 37 in New York City, one of four union plaintiffs in the lawsuit:

The corrupt pricing practices uncovered in this lawsuit bled money from
all union benefit plans and ultimately from our members’ pockets.

The settlement, which a federal court is expected to approve in early 2007, would force First DataBank Inc., the leading publisher of prescription drug prices, to roll back by 4 percent the “average wholesale price” of nearly all brand-name drugs sold at retail pharmacies.

For more details on the lawsuit and the settlement, click here in story at link above.

[ProgressiveEconomist]

1. k&r

[mcking]

2. This should help state budgets

Potentially it is HUGE for state Medicaid programs, as the price they pay for drugs is typically pegged to the average wholesale price published by First DataBank. In the Medicaid program I used to work for, the cost of prescription drugs is a major driver of the cost of the program.

The federal Medicaid budget will benefit also.