J&J legal crew stays busy; pharmacists wary of Walgreens-Express Scripts deal

We wrap up the week by mentioning several issues involving pharmaceuticals and pharmacies. Oh, and money and more money.

First, a group of consumers will actually get nary a dime in a case they brought against McNeil Consumer Healthcare related to the dozens of recalls involving the Fort Washington-based unit of Johnson & Johnson.

Philadelphia federal district court judge Mary McLaughlin said in a memo - followed by an order to dismiss the case - that customers who bought McNeil products could not sue because they did not demonstrate any harm had come to them from using products recalled by McNeil.

The McNeil factory in Fort Washington stopped making over-the-counter medicine in April of 2010 because of manufacturing problems, which led to the recalls. The company says it is doing $100 million in repairs and remediation. But the U.S. Food and Drug Administration and a federal judge will have to approve a restart of production. McNeil plants in Lancaster and Las Piedras, Puerto Rico, are operating under tighter scrutiny.

The plaintiffs, whose individual suits were grouped together, argued that they should be compensated because the company knowingly made products not up to their quality standards. The judge disagreed, saying none could prove injury and that the company had offered refunds.

Near the end of her 53-page memo, McLaughlin wrote that the plaintiffs' suit "fails to assert any claim by a plaintiff who has suffered an injury in fact that is fairly traceable to the conduct of the defendants."

Second - and staying with the J&J legal team - the Wall Street Journal reported that J&J and the Justice Department had agreed on a deal for "as much as" $2.2 billion to resolve charges related to kickbacks to a nursing home pharmacy company and off-label marketing of the anti-psychotic drug Risperdal.

The dollar figure in reports has continued to shift in recent months. The Journal cited anonymous sources and its wording implied an upper limit of $2.2 billion, with uncertainty on the lower side based on whether any of the several states involved opt out of the agreement. Government and company officials declined comment. GlaxoSmithKline recently settled a multi-drug case for $3 billion, which is the largest settlement in the industry.

A link to the Journal story is here.

Next, Walgreens and Express Script finally said they had a deal. Neither the drug store chain nor the biggest pharmacy benefits manager revealed details of the agreement that ended long negotiations.

The lack of details and the snarling that preceded the agreement worried the National Community Pharmacists Association. Chief executive officer B. Douglas Hoey said in a statement that the dispute is "emblematic of the uneven PBM/pharmacy ‘relationship.’ "

Pharmacy benefits managers are supposed to represent companies, which hire them to efficiently and effectively manage the prescription drug portion of the employer-based health insurance program offered to employees. Express Scripts recently took over Medco, which was actually a larger company. Critics of PBMs have said that such organizations don't alway look out for the employers they represent.

Regardless, the new Express Scripts is a more powerful player in the marketplace.

One place it exerts power is in negotiations over how much pharmacists get for dispensing drugs.

"The fact that a mega-chain like Walgreens with the negotiating leverage of 8,000-plus pharmacy locations had prolonged difficulty reaching what it considers equitable terms with a major PBM makes obvious that the take-it-or-leave-it contracts that PBMs make to small business community pharmacies are that much more one-sided," Hoey said. "This reinforces the need for pro-patient, pro-pharmacist policies – such as the Pharmacy Competition and Consumer Choice Act (H.R. 1971/S. 1058) – that advance a more level playing field."

Hoey also urged independent community pharmacists and their patients to be more active in supporting "reforms and health plan designs that properly align to the interests of payers and patients, while also focusing on proper utilization of pharmacists."

Hoey's group has a website, of course, which is www.whorunsmydrugplan.com.