AHF Sues Abbott and AbbVie for Cheating on AIDS Drug Pricing

  AHF Sues Abbott and AbbVie for Cheating on AIDS Drug Pricing

AHF filed a lawsuit in the Superior Court of the State of California alleging
that between 2005 -2013, Abbott Laboratories and its spinoff AbbVie failed to
  provide legally required discounts for HIV drugs, overcharging AHF over $2
     million during the eight year period. Abbott is bound by contractual
    obligations to sell drugs, including AIDS drugs, to AHF and others at
       discounted prices under the 340B federal discount drug program.

 The purpose of the 340B Program is to allow safety net providers such as AHF
    to stretch scarce resources as far as possible, reaching more eligible
 patients and providing more comprehensive services. In October, AHF filed a
   similar lawsuit against Johnson & Johnson for its parallel abuse of the
                            340B-pricing Program.

Business Wire

LOS ANGELES -- November 27, 2013

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

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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