DC 37 Reaches Proposed $24 Million Settlement
Against Drug Manufacturer

• Labor and Consumer Coalition Announce $24 Million Settlement
  of Legal Action Against AIDS Drug Maker (PDF*)

The DC 37 Health & Security Plan participated as a lead plaintiff in a nationwide class action suit against EMD Serono, Inc., Serono Laboratories, Inc. & Merck Serono International S.A., the manufacturer of Serostim, which is prescribed to treat AIDS wasting.

According to Executive Director Lillian Roberts, "This case cried out for justice. Some of our most vulnerable members who could ill afford the co-pays for this drug were harmed economically as was our benefits Plan, which paid the hugely expensive ingredient costs for Serostim. Once the settlement is approved by the court, both our members and the Plan will be able to recoup a fair share of what they paid."

In early 2006, Serono Laboratories agreed to pay $704 million in fines and restitution to the federal government in a criminal investigation brought by the U.S. Attorney. Because that agreement did not provide any reimbursement to consumers and benefit plans, DC 37, a member of the Prescription Access Litigation Project (PAL), filed a civil suit in federal court against Serono.

As DC 37 had learned, the U.S. Attorney asserted in the criminal case that "nearly 85% of the prescriptions written for Serostim were not medically necessary." Because this drug cost the Plan $21,000 for a recommended 12-week course of treatment and because our members had to pay co-pays to receive this drug, DC 37 felt compelled to seek justice in the court for the Plan and its members.

After nearly a year of hard-fought litigation, the parties agreed to settle. The $24 million settlement, if approved by the federal court in the upcoming months, will be used to reimburse the Plan and our members as well as others for their costs in purchasing this drug.

DC 37 is New York City's largest public employee union, representing 121,000 members and 50,000 retirees.

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