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David Mittleman
David Mittleman
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Lawsuit leads to lower prices for prescription drugs

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Consumers could see some relief from their prescription drug costs—the prices of hundreds of brand name drugs are about to be cut 4% and prescription drug users may soon receive a reimbursement check as compensation for overpayment on their medications.

The price cuts and the reimbursement checks are a result of a federal class action lawsuit against two drug-pricing publishers and a major drug wholesaler who are both being accused of artificially inflating drug prices. An economist, a witness for the plaintiffs, estimates a $1 billion savings the first year if the price cuts are implemented, with a savings of $100 million directly to consumers. These cost savings will have the most impact on the uninsured or underinsured, while the reimbursement checks will also primarily go to this group as well. Under the $350 million settlement, $60 million has been set aside as payouts for the uninsured and underinsured who purchased such drugs as Lipitor and Ambien, and hundreds of other drugs between August 2001 and January 23, 2009.

The settlement already has preliminary court approval. However, pharmacies and pharmacy-benefit managers are trying to stop the price rollbacks, in particular, which could shrink their profit margins. So far they have been unsuccessful in their appeals, as one of their motions was recently rejected by the federal judge overseeing the litigation in a U.S. District Court in Massachusetts.