AIDS Group Claims SmithKline Overcharged It
LOS ANGELES (CN) - SmithKline Beecham overcharged the AIDS Healthcare Foundation $2.2 million for drugs, the nonprofit claims in court.
The foundation, which provides AIDS and HIV drugs to poor and indigent people regardless of their ability to pay, claims the drug company charged it full price for drugs it is legally entitled to buy for a discount.
The foundation accused SmithKline Beecham dba GSKSmithKline of unfair competition, breach of contract, negligence, unjust enrichment and breach faith, in Superior Court.
The foundation claims it qualifies under section 340B of the Public Health Services Act to buy discounted drugs, which it dispenses through its clinics and pharmacies.
The 340B drug pricing program offers a safety net to providers, such as the foundation, which serve poor people.
"GSK is bound by both federal law and contractual obligations to dispense qualifying drugs to covered entities under the 340B program at discounted rates," the lawsuit states. "AHF [AIDS Healthcare Foundation] brings this action because GSK has failed to fully satisfy its obligations with respect to drugs it sold to AHF over a period of many years."
The foundation claims that for eight years it has acquired thousands of drugs covered under the statute through a pharmaceutical supplier and 340B vendor that contracted with GSKSmithKline for drugs used to treat AIDS patients.
The foundation says it "discovered within the last six months through routine internal audit activity, and then more detailed claims analysis, that it overpaid GSK by over $2 million for outpatient drugs purchased all the way back to 2005."
Though 340B-eligible patients received the drugs, the foundation says, it paid the non-discounted price. It claims that SmithKline blew off its request for $2.2 million in reimbursement.
The foundation seeks that amount in damages, and costs.
AIDS Healthcare Foundation in-house attorney Laura Boudreau filed the complaint.
SmithKline could not immediately be reached for comment after business hours Tuesday.