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12/1/2013 9:52:20 PM
AHF Sues Abbott and AbbVie for Cheating on AIDS Drug Pricing
LOS ANGELES--(BUSINESS WIRE)-- AIDS Healthcare Foundation (AHF) filed a lawsuit in California against pharmaceutical giant Abbott Laboratories and its spinoff AbbVie (Abbott) alleging that the Abbott companies have “…failed to fully satisfy their obligations with respect to the drugs they sold to AHF over a period of many years,” under the 340B Program, a Federal drug discount program designed to stretch scarce Federal resources as far as possible for safety net healthcare providers such as AHF. The Abbott Companies include Abbott Laboratories, Abbott Laboratories Inc., dba Abbott Sales, Marketing & Distribution Co., and AbbVie Inc. Together, they control a significant portion of the AIDS drug market with drugs that include Norvir, and Kaletra.
AHF’s lawsuit against Abbott was filed Tuesday in the Superior Court of California, County of Los Angeles, Central District [case #BC528868]. The action against Abbott includes claims of “Violation of California Unfair Competition Law; Breach of Contract—Third Party Beneficiary; Negligence; Unjust Enrichment and Breach of Covenant of Good Faith and Fair Dealing.”
“Although AHF made Abbott aware that we were wrongly charged the non-discounted prices before filing this lawsuit, Abbott basically refused to reimburse AHF the excess amounts AHF paid for Abbott’s drugs,” said Michael Weinstein, President of AHF. “As a result, Abbott has now forced AHF to seek judicial intervention to obtain the critically needed discounted drug pricing to which AHF is—and was—entitled.”
“AHF is entitled to this relief based on several legal grounds, including statutory, contractual and equitable theories,” said Laura Boudreau, Chief Counsel for Operations for AIDS Healthcare Foundation. “But the main purpose of the suit is to stop what AHF sees as a growing trend among manufacturers to impose increasingly unreasonable, arbitrary, and unlawful restrictions on a 340B safety net provider’s ability to obtain the 340B pricing to which it is entitled by law when the provider discovers that its purchases, made at wholesale, were in fact eligible for 340B discount prices. AHF believes, and its lawsuit asserts, that Abbott and AbbVie should not be permitted to effectively refuse to comply with their legal and contractual obligations with respect to 340B Program covered drugs without consequence and thereby deprive AHF of savings that it would use to benefit the vulnerable safety net population it serves.”
About the 340B Program
340B is a Federal program overseen by the Health Resources and Services Administration’s (HRSA) Office of Pharmacy Affairs (OPA) that requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities such as AHF at significantly reduced prices. The program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.
Under the 340B Program (42 U.S.C. § 256b(i)(1)), manufacturers are required to ensure that Covered Entities pay no more for any product than the statutorily set, discounted 340B ceiling price.
“Given the profits that manufacturers like Abbott make on lifesaving AIDS drugs, the fact that they will not extend the legally required drug pricing discounts to a safety net care provider like AHF is shameful,” added Weinstein.
About AIDS Healthcare Foundation
AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to more than 250,000 individuals in 32 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook: www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare.
AIDS Healthcare Foundation
Ged Kenslea, Senior Director, Communications
Tel: (323) 308-1833
Cell: (323) 791-5526
Laura Boudreau, Chief Counsel for Operations
Tel: (323) 860-5202
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