Business Wire - Mylan Laboratories Settles United Wisconsin Services Suit; Class Action Lawsuit Accused Drug Manufacturer of Unfair Prices on Lorazepam and Clorazepate
Business Editors
MILWAUKEE–(BUSINESS WIRE)–Feb. 2, 2001
United Wisconsin Services, Inc., a Milwaukee-based health insurer, has entered into a Stipulation of Settlement with Mylan Laboratories, Inc. which, subject to court approval, will settle class action litigation on behalf of health insurers and other third party payers concerning prices paid in 1998 and 1999 for the generic versions of the prescription drugs lorazepam, and clorazepate.
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Pursuant to the agreement, Mylan will pay $25 million and a third party will pay an additional $285,000 to settle all claims of third party payers for payments made on behalf of users of lorazepam and clorazepate in 19 states and the District of Columbia. In a separate class action lawsuit, in which United Wisconsin Services is not a party, Mylan has agreed to pay $10 million to settle third party payer claims in the other 31 states. Mylan has also agreed to settle separate lawsuits brought by the Federal Trade Commission and state attorneys generals.
United Wisconsin Services sued in the United States District Court for the District of Columbia in May 1999, charging Mylan with violating various states’ antitrust and consumer protection laws by conspiring with raw material suppliers to corner the market for the active pharmaceutical ingredients used to make generic lorazepam and generic clorazepate. United Wisconsin charged that this prevented Mylan’s competitors from manufacturing generic lorazepam and generic clorazepate, enabling Mylan to raise prices for these drugs dramatically, at the expense of consumers and third party payers. United Wisconsin Services was later joined in the lawsuit by Blue Cross Blue Shield of Kansas and Carefirst Blue Cross Blue Shield (Washington, D.C.).
United Wisconsin Services is a provider of managed healthcare services and employee benefits products through its subsidiaries, Blue Cross & Blue Shield United of Wisconsin, Inc., Compcare Health Insurance Corporation, Unity Health Plans Insurance Corporations and Valley Health Plan Incorporated. United Wisconsin Services serves markets in Wisconsin and 39 other states and provides managed care benefits to persons in all states.
“We must do what we can to hold down the skyrocketing cost of pharmaceuticals,” said Thomas R. Hefty, chairman, president and CEO of United Wisconsin Services Inc. “When drug companies engage in unfair trade practices, it’s important for us to do something about it.”
United Wisconsin Services has been a leader among managed care companies in using litigation to redress unfair trade practices which increase prescription drug costs to the United States healthcare system. United Wisconsin is currently prosecuting three other class action lawsuits concerning unfair trade practices which increased prices paid by consumers and third party payers for the prescription drugs Cardizem CD (diltiazem hydrochloride), Hytrin (terazosin hydrochloride), and Coumadin (warfarin sodium). United Wisconsin Services is represented in these class action cases by the law firm of Lowey Dannenberg Bemporad & Selinger, P.C., White Plains, New York.
Headquartered in Milwaukee, United Wisconsin Services operates Wisconsin’s largest health maintenance organization system, and it includes CompcareBlue, Unity Health Plans and Valley Health Plan. The company also has substantial specialty insurance products and services operations.
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