UPDATE 1-U.S. justices decline to hear Glaxo appeal over Avandia

Mon Apr 15, 2013 10:31am EDT

By Lawrence Hurley

WASHINGTON, April 15 (Reuters) - The U.S. Supreme Court on Monday declined to consider whether private insurers can sue giant drugmaker GlaxoSmithKline Plc over health costs incurred by its Avandia diabetes drug.

Humana Inc's Humana Medical Plans had sued Glaxo for healthcare expenses Medicare patients incurred after using the drug, which has been linked to heart problems.

Glaxo has paid out at least $460 million to resolve legal claims related to the drug, according to court papers.

The insurance company administers Medicare Advantage policies, in which private companies provide Medicare coverage. Medicare is the government program that provides healthcare benefits for senior citizens and some under age 65 with certain health problems.

Humana sued Glaxo under the federal Medicare Secondary Payer Act, which it says gives it and other private insurers a right to sue for reimbursement. The law allows for double damages.

Glaxo countered that the law does not allow insurance companies that provide Medicare Advantage services and have incurred their own costs to sue.

The company says companies like Humana should seek compensation under state laws. The Philadelphia-based 3rd U.S. Circuit Court of Appeals ruled for Humana, prompting Glaxo to seek high court review.

The case is GlaxoSmithKline v. Humana, U.S. Supreme Court, No. 12-690.

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