Judge doubles damages in drug pricing case

By Emily Chasan

NEW YORK (Reuters) - A U.S. judge has ordered pharmaceutical companies AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz) and Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz) to pay double damages in a case over false mark ups of U.S. drug prices through 2003, according to court documents filed on Friday.

U.S. District Judge Patti Saris, who sits in Massachusetts District Court, found that the companies had acted willfully, and ordered AstraZeneca to pay more than $12.9 million in total damages, while Bristol-Myers was ordered to pay $695,594.

Plaintiffs in the class-action lawsuit said the drug makers boosted published average wholesale prices, which until 2003 were the basis for reimbursements from Medicare, state governments and private insurers.

In an earlier ruling in June, Saris found that the two companies and Schering Plough Corp (SGP.N: Quote, Profile, Research, Stock Buzz) subsidiary Warrick Pharmaceuticals grossly inflated the prices of drugs, including chemotherapy agents, to the detriment of the U.S. government's Medicare program for the elderly, insurance companies and individuals.

In her ruling this week, Saris said that the companies "knew that Medicare beneficiaries, and thus their insurers, were locked by statute into paying twenty-percent of grossly inflated phony AWPs, which bore no relation to any average of wholesale prices in the marketplace."

AstraZeneca said in a statement on Friday that it was "disappointed" with the ruling and intends to appeal.

"We believe the ruling is unsupported as the conduct at issue was the result of highly competitive conditions in the pharmaceutical marketplace, which led to discounting," AstraZeneca said.

A Bristol-Myers spokesman said the company also intends to appeal.