Dey, L.P. Reaches Settlement with Commonwealth of Massachusetts onPricing Litigation-- Settlement resolves all Commonwealth pricing claims against DEY --
NAPA, Calif., April 24, 2007 /PRNewswire/ -- Responding to the announcement from the Commonwealth of Massachusetts Office of the Attorney General about the settlement between the Commonwealth and Dey, L.P., John Kling, Senior Vice President of Legal Affairs at DEY, stated, "We have agreed upon this settlement with the Massachusetts Attorney General as a means to resolve all the claims in the pricing litigation brought by the Commonwealth. The net amount of cash paid to the Commonwealth of Massachusetts, excluding legal fees and the Federal government's share of the settlement, is $1,760,000."
DEY has consistently participated legally and ethically within National and various State reimbursement systems. Kling continued, "When virtually an entire industry is sued -- as has been the case with the pricing lawsuits similar to this one in Massachusetts that have been filed around the country by dozens of attorneys general -- it indicates that the real issue is not the industry's conduct, but rather the government's own reimbursement system. The claims against DEY in Massachusetts and elsewhere derive from a government reimbursement model that relied on published Average Wholesale Prices (AWP). For more than three decades, the Federal and State governments have known about the AWP-based reimbursement model, understood its limitations, and accepted its use as a way to gain the voluntary participation of pharmacists and other healthcare providers in the public healthcare entitlement program Medicaid. The 'spread' between dispensers' acquisition costs and Medicaid reimbursements provided the mechanism whereby pharmacists and other healthcare professionals could recapture their actual dispensing costs.
"The problems with the AWP-based reimbursement model are a primary reason why Congress and the Administration reformed the pricing system under the Medicare Modernization Act of 2003. Many in the pharmaceutical industry, including DEY, supported those reforms."
Kling continued, "DEY has settled this litigation with the Commonwealth of Massachusetts as a pragmatic solution to avoid any further costs of continuing litigation and the vagaries inherent in it. With this relatively modest settlement now behind us, we can move forward with what we do best -- manufacturing and marketing high-quality pharmaceuticals for the people of Massachusetts and the rest of the country."
As part of the settlement, the Commonwealth of Massachusetts acknowledges that the settlement does not constitute either an admission of, or evidence of, fault, liability, or unlawful conduct by DEY or its affiliates. DEY has in place a major compliance program to ensure that its sales representatives act in accordance with the 2003 OIG Compliance Program Guidance for Pharmaceutical Manufacturing.
About Dey, L.P.
Dey, L.P. is a specialty pharmaceutical company focused on the development, manufacturing and marketing of prescription drug products for the treatment of respiratory diseases, respiratory-related allergies, and emergency care medicine. As the U.S. leader in nebulized respiratory medication, DEY puts patients first through its development of innovative and affordable therapies. The Web sites for DEY include http://www.dey.com, http://www.accuneb.com, http://www.curosurfusa.com, http://www.cyanokit.com, http://www.duoneb.com.
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Posted: April 2007