CHICAGO (CN) – Takeda Pharmaceuticals intentionally packages its cancer drug Velcade in vials 37 percent larger than an average dose so that patients are forced to pay for more of the drug than they need, two union funds claim in a RICO suit.
Takeda Pharmaceutical Co. is the maker of the drug Velcade, a treatment for patients who have either plasma cancer or cancer of the lymph nodes. Its net sales of Velcade exceeded $1 billion in 2014.
The SEIU Local 4 Health and Welfare Fund and SEIU Home Care and Child Care Health Fund sued the pharmaceutical company in Chicago federal court on Thursday over its packaging of the drug in 3.5 mg vials, which the union funds say ensures that a significant portion of the drug will go to waste.
This distribution method has “caused plaintiffs and the class to suffer significant out-of-pocket losses as they bore the cost of the discarded portion of Velcade,” the complaint states. “Plaintiffs estimate that during the class period over $1 billion has been spent by the class on ‘wasted Velcade.’”
Takeda only packages the drug in the 3.5 mg vials, but a normal dose is just 2.5 mg, the funds claim.
Three and a half milligrams of Velcade is enough to treat a 6-foot-6 patient who weights 250 pounds. If the patient is smaller than that, what is left in the vial goes into the trash.
Packaging drugs in oversized, single-use vials is a common tactic in the pharmaceutical industry to inflate profits, according to the complaint, which cites a study finding that 10 percent of revenue from the top 20 cancer drugs, including Velcade, can be attributed to portions that went into the garbage.
“Researchers estimate that 27 percent to 30 percent of Velcade sales in the US are related to leftover drug or Velcade waste, which costs third party payors and patients $308 million annually,” the lawsuit states.
In Europe, Velcade is available in 1 mg vials, meaning that far less of the drug is wasted – and patients don’t have to pay for that waste.
But in the U.S., Takeda knows it can “continue to incentivize physicians and hospitals to prescribe Velcade knowing that they can bill for wasted Velcade at a mark-up or profit,” the funds allege.
They seek punitive damages for claims of RICO violations, conspiracy, and unjust enrichment, as well as reimbursement for the money spent for the amount of drug allegedly wasted by Takeda’s oversized packaging.
The funds are represented by Elizabeth A. Fegan with Hagens Berman Sobol Shapiro in Chicago.
Takeda did not immediately respond to a request for comment made over the weekend.