To Share $24M Settlement
DC 37 Wins AIDS Drug Deception Suit

By MEREDITH KOLODNER

District Council 37 and the Government Employees Hospital Association won a $24 million settlement in a class-action suit against a major pharmaceutical company for falsely marketing an AIDS treatment drug.

LILLIAN ROBERTS: Members, plan suffered.

The agreement, announced Feb. 16, resolves claims that Serono wrongfully encouraged doctors to prescribe a drug for AIDS patients who didn't need it and promoted the use of a device that improperly diagnosed people as having AIDS wasting, the condition of massive weight loss experienced by AIDS patients. The unions and other groups that paid for the use of the drug are entitled to compensation for the amount they spent on it. DC 37 members will also be paid for any out-of-pocket expenses such as co-pays.

There is no allegation in the case that any patient was medically harmed by Serono's conduct.

'Cried Out for Justice'

"This case cried out for justice," said Lillian Roberts, the executive director of DC 37. "Some of our most vulnerable members who could ill afford the co-pays for this drug were harmed economically, as was our benefits plan."

A 12-week regimen of the drug Serostim costs $21,000 and co-pays were $15 last year. DC 37 does not yet know how much it is owed, but records from one two-year period show payments of $240,000 by the union's Health and Security Plan. The union is planning to make its data available to any member who needs assistance filing an individual claim.

Claims can be filed by union benefit funds, private health plans, self-insured employers and individuals who paid for the drug between July 1995 and December 2006. Individuals' heirs are also eligible. The settlement, which was granted at a preliminary hearing, will not be official until June, when a judge will hold a Fairness Hearing to ensure that the settlement is fair to all parties, as is required in all class-action suits.

The lawsuit was filed in September 2005 with the help of the Prescription Access Litigation Project, a coalition of unions and health-care advocacy groups. One month later, the Federal Government reached a settlement of a criminal case brought by the Department of Justice under which Serono paid $704 million in fines and entered a guilty plea for the unlawful promotion of Serostim. The U.S. Attorney in charge of the case asserted that "nearly 85 percent of prescriptions written for Serostim were not medically necessary."

'Big Victory'

To help convince doctors to use the drug, Serono marketed a body mass-measuring device that was not approved by the Food and Drug Administration. Loss of body mass is one of the major indicators of AIDS wasting. The FDA has approved Serostim, but not for most of the uses for which the company marketed it.

Serono, like most large pharmaceutical companies, spends more money on advertising than it does on research, according to a study by the health advocacy group Families USA.

"Anytime you can hold a pharmaceutical company accountable," said Audrey Browne, the lead attorney on the case for DC 37, "and repay monies that should not have been paid out, it's a big victory. These are not easy battles to fight."