Kaiser Receives Major Blow In Generic Drug Cost Lawsuit

By NTK Staff | 09.01.2017 @10:49am
Kaiser Receives Major Blow In Generic Drug Cost Lawsuit

Kaiser is facing charges that it bought generic drugs at low prices and then sold them to customers at higher prices.

A judge has ruled against Kaiser’s motion to throw out a class action lawsuit against the California health plan. According to Law360:

A California judge Thursday tentatively rejected Kaiser Foundation Health Plan’s bid to toss a putative class action claiming it inflates certain generic drug prices, but said he’d rethink the matter after Kaiser argued that its promise for some below-copayment prices shouldn’t open the company to allegations its prices could be lower.

Kaiser faces allegations that it acquired generic drugs at low prices then turned around and sold them to its customers at higher prices.

Gallimore’s putative class action alleges that although Kaiser incurs low costs to acquire and dispense generic drugs due to the fact that it controls which medicines are covered and distributes them through its own pharmacies, the company artificially sets higher prices in order to shift more of the cost onto members. For example, the suit alleges that a drug that should be priced at $4 is priced higher so its members are charged a $10 copayment. But even when pricing certain generic drugs below the copayment amount, that price is nevertheless above the reasonable cost, Gallimore claims.

Ironically, Kaiser is publicly advocating for a new drug price transparency bill in the California legislature despite its own history of overcharging its customers for generic drugs.

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