Daraprim is an antiseptic drug used in treating and preventing various parasitic infections like malaria and toxoplasmosis (a deadly infection affecting people having HIV, immunocompromised patients, and children born to women who got infected during pregnancy). This drug can serve the role of a lifesaver among people impacted by potentially fatal parasites. A claim has been filed against Daraprim manufacturer Vyera Pharmaceuticals alleging that they raised the price of brand-name drugs by 4000% while trying to suppress generic alternatives to malaria preventative. Insurance companies pointed out that Vyera Pharmaceuticals’ tactics included exclusive restrictions in the contracts between Vyera and specialty manufacturers. This blocked competitors from getting the ingredients and accessing key market data for making Daraprim. This $28 million settlement is going to benefit third-party payors who either provided reimbursement or paid for Daraprim between August 7th, 2015 and January 28th 2022.
Martin Shkreli, also known as “pharmacy bro” in pop culture formerly owned Vyera Pharmaceuticals. Shkreli recently received a lifetime ban from running any public U.S. company. He gained overnight popularity after increasing the price of Daraprim medicine from $17.5 per tablet to $750 per tablet in 2015. Third-party payors joined hands to object to this magnanimous increase in price against Vyera Pharmaceuticals, its parent company LLC and Phoenixus AG, Kevin Mulleady, and Martin Shkreli through a class action lawsuit. Kevin Mulleady, the former CEO of Vyera has been banned from consulting for, working for, or controlling a pharmaceutical company for seven years. He will have to pay a fine of $250000 in violation of these terms. The plaintiffs argued that this price increase violated Sections 1 and 2 of the Sherman Act and various state antitrust, unjust enrichment, and consumer protection laws. While the defendants did not agree to the charges of wrongdoing, they decided to resolve the allegations with a settlement worth up to $28 million.
The class action settlement has made it mandatory for Phoenixus and Vyera to make Daraprim available to all potential generic competitors at the cost of producing the drug or its list price. The company will also have to provide prior notification of any planned pharmaceutical transaction having a value of $25 million or more.
The last date for excluding oneself from the settlement is 18th April 2022. A written request has to be sent if you wish to keep the suing right at your own expense. The deadline for objecting to the settlement is 23rd May 2022. Written objections must be submitted if you wish to comment on or object to the proposed Plan of Allocation, Settlement, and/or the request for litigation expenses and attorneys fees.
As per the settlement terms, a minimum cash payment of $7 million will be offered to the class members alongside additional potential cash payments up to a maximum of $21 million. Corporate Defendants will pay 14% of the net proceeds earned from monetizing a Corporate Asset apart from a Priority Review Voucher and 14% of the net proceeds earned from monetizing a ketamine asset as part of the Class Contingent Payments. This shall be based on any transactions executed over the coming five years at a total ceiling of $10.5 million. The Corporate Defendants are also eligible to pay 14% of the net proceeds to the Settlement Class earned from any transaction monetizing a priority Review Voucher executed over the next 10 years with the total class contingent payment capped at $21 million.
Eligibility For Making Claim: Third-party payors who provided or paid reimbursement expenses for Daraprim between 7th August 2015 and 28th January 2022 are eligible to make claims under the TPP Settlement. This comprises of all entities that for consumption by their employees, members, participants, insureds or beneficiaries, and not for resale paid, indirectly purchased, and/or provided reimbursement for either a part of or the whole of Daraprim price within the Settlement Class period. The various third parties falling under the Settlement Class include self-insured employers, welfare benefit plans, health insurance companies, union health benefit plans, and entities with self-funded plans that enjoy a contractual relationship with a health insurance company or other entity for serving as a third-party claims administrator to administer the prescription drug benefits.
However, the following have been excluded from the settlement class:
- Consumers who are natural persons.
- Defendants and their affiliates, employees, subsidiaries, parents, whether they have been named or not named in the complaint.
- All state governmental and federal entities apart from towns, cities, municipalities, or countries with self-funded prescription drug plans.
- Judges assigned to this settlement case and their immediate family members.
- Fully-insured health plans that cover 100% of their reimbursement obligation to members.
Proof Of Purchase: Payments will be capped at 80% reimbursement of Daraprim payments without proper claim documentation. Proof of Purchase includes canceled checks, receipts, invoices, other records, and statements.
Potential Claim Amount: This fund consists of a $7 million minimum with $21 million in additional potential cash payments. The company has also agreed to resolve all allegations concerning price gouging and monopoly by paying $40 million to the Federal Trade Commission (FTC). This is expected to offer relief to consumers affected by the price hike. $10 million has been guaranteed upfront and the remaining $30 million will be payable over 10 years depending on the company’s financial health.
According to the settlement terms, third-party payors are eligible to collect cash payments as per the amount spent by them for Daraprim. The payment will be determined by the documentation provided, amount claimed, and other factors with a minimum ceiling of $100. If the Class Members fail to produce claim documents, then their payments will be capped at 80% reimbursement of Daraprim payments made.
Settlement Website: DaraprimTPPSettlement.com
Claim Form: Daraprim TPP Settlement
Deadline For Submitting Claim: 06/01/2022
Final Hearing Date: 06/17/2022
Settlement Pool: $28 million