>> The Prescription Access Litigation Project
Community Catalyst created the Prescription Access Litigation Project ("PAL") in 2001 to make prescription drugs more affordable for consumers by using class action litigation and public education to bring an end to illegal pharmaceutical price inflation. Prescription drug prices in the United States are the highest in the world and have become a significant barrier to increasing access to health care in the United States. Given the drug industry's powerful legislative lobby, PAL chose the courts as a value-added, relatively level playing field through which the industry's inflationary practices can be stopped.

PAL has grown quickly and now is a diverse coalition of over 92 organizations, including state-based groups representing 35 states and the District of Columbia as well as several national organizations. The class action firms Hagens Berman, LLP, Goodkind Labaton Rudoff & Sucharow LLP and Zwerling, Schachter & Zwerling, LLP act as counsel in PAL's litigation efforts. Additionally, the AARP's Litigation Arm, AARP Foundation Litigation, serves as co-counsel on several cases.

PAL's cases challenge a variety of illegal practices that are regularly committed by pharmaceutical industry players. Because the high cost of drugs is attributable largely to the pharmaceutical industry's illegal marketing and pricing practices, these lawsuits, which seek to bring an end to these practices, have great potential to change industry behavior and in turn increase consumer access to vital drugs. PAL has already had an impact on behavior and will continue to monitor and combat illicit activities which harm American consumers who are forced to pay unfair prices. Some of the practices PAL is challenging are detailed below.

Anti-Competitive Practices
New drugs are subject to multi-year patent protections during which no other manufacturer can sell an equivalent drug. Brand name drug manufacturers often try to extend these patents beyond their legal limit, called evergreening, because of the huge profit margins they generate by keeping less expensive (typically 30-70% cheaper) generics off the market. PAL and its partners have already successfully reached a settlement in the BuSpar case. For additional examples see PAL's cases on Relafen, Augmentin, Neurontin I and Wellbutrin. Drug manufacturers have also entered into illicit anti-competitive agreements. In some instances, brand name makers pay off potential generic competitors to stay off the market. These sorts of anticompetitive agreements are challenged in the PAL cases on Cipro, K-Dur and Tamoxifen. PAL has also filed against the collusion between two generic drug manufacturers to maximize their profits from production of Adalat.

Improper Drug Promotions
The pharmaceutical industry spends nearly 40% of its revenues on the promotion of drugs, and its expenditure on direct-to-consumer advertising increased almost 200% from 1989 to 2001.

The pharmaceutical industry appears to be endlessly inventive when it comes to marketing and selling its products. A number of pharmaceutical companies promote 'off-label' usage (those outside of specific indications approved by the FDA) of certain drugs. In so doing, they are circumventing FDA safety and efficacy regulations requiring them to test and seek approval for each use. These off-label promotion efforts include making payments to doctors to place their names on articles paid for by the companies (and not written by the doctors), to listen to presentations about the unapproved uses of drugs (framed as 'consultations' to the companies by the doctors) and to reward those who actively prescribed a particular drug. PAL has a filed a cases revolving around the off label promotions of Bextra, Estratest and Neurontin (the Neurontin II case). In these companies' efforts to seek 'easy revenue' by creating a need for a particular drug that has not even been approved to address certain conditions, the consumer is often unaware that the new medications that they have been prescribed are not necessarily the most appropriate therapy.

Price Manipulation
Drug manufacturers manipulate and inflate drug prices through use of the "average wholesale price." This price, called AWP, is sometimes referred to as "Ain't what's paid," because drug manufactures typically provide extremely inflated figures rather than an average wholesale price. These inaccurate price lists are then used as the basis for sales to most large buyers, including Medicaid and Medicare, to generate extreme profits. For examples see the Lupron and the AWP megacase. Pharmacy benefit managers were created to save money for prescription drug buyers. PBMs negotiate prices with drug manufacturers. Unfortunately, they typically do so in secret and only return a portion of the savings to the consumer. PAL has filed suit against the nation's four largest PBMs in order to challenge this practice and require them to comply with their fiduciary duty to consumers.