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Third-Party Payor - Frequently Asked Questions

  1. Why did I get this Notice?
  2. What is the lawsuit about?
  3. Why is this a class action?
  4. Who qualifies as a Third-Party Payor?
  5. Why is there a Proposed Settlement?
  6. How do I know if I am included in the Proposed Settlement?
  7. What does the Proposed Settlement provide?
  8. How does a TPP Class Member file a claim?
  9. What am I giving up If I do nothing and stay in the Classes?
  10. What do I do if I don’t want to be in the Proposed Settlement?
  11. How do I exclude myself from the Classes?
  12. Can I object to or comment on the Proposed Settlement?
  13. What is the difference between objecting to the Proposed Settlement and excluding myself from the Proposed Settlement?
  14. Do I have a lawyer representing my interests in this case?
  15. How will the lawyers be compensated?
  16. Should I get my own lawyer?
  17. Payments to Class Representatives
  18. When and where will the Court decide on whether to grant final approval of the Proposed Settlement?
  19. Must I attend the Final Approval Hearing?
  20. May I speak at the Final Approval Hearing?
  21. Where do I obtain more information?

1. Why did I get this Notice?
You received this Notice because you are a TPP that may have made reimbursements for the GSK Covered Drugs between January 1, 1991 and August 10, 2006. You may also have requested this Notice after seeing the Summary Notice in a publication.

This Notice explains:

  • What the lawsuit and Proposed Settlement are about.
  • What the lawsuits claim and what GSK says about the claims.
  • Who is affected by the Proposed Settlement.
  • Who represents the Class in the lawsuit.
  • What your legal rights and choices are.
  • How to file a claim.
  • How and by when you need to act.

2. What is the lawsuit about?
Plaintiffs allege that Defendant drug companies either report the average wholesale price (“AWP”) of each drug they make to trade publications or provide those publications with information from which the publications calculate an AWP for each of Defendants’ drugs. The published AWP of a drug has been used to set the price that consumers who made Medicare Part B co-payments and Medicare paid for the drug. The published AWP is also often used by insurance companies to determine what they will reimburse doctors or pharmacies for these drugs. The lawsuits claim, among other things, that Third-Party Payors (“TPPs”) who made reimbursements for drugs covered by Medicare Part B (e.g., through Medigap” supplemental insurance policies) and TPPs who made reimbursements for such drugs based on a contract using AWP as a reimbursement standard paid more than they should have paid for the drugs at issue because drug companies, including GSK, intentionally reported false and inflated AWPs concerning the drugs at issue.

GSK denies any wrongdoing. The Proposed Settlement is not an admission of wrongdoing or an indication that any law was violated. GSK has entered into the Proposed Settlement solely to avoid further expense, inconvenience, and the burden of these litigations and any other present or future litigation arising out of the facts that allegedly gave rise to these litigations. GSK also wishes to avoid the distractions and diversion of their personnel and resources, and thereby to put to rest this controversy and to avoid the risks inherent in uncertain complex litigation.

3. Why is this a class action?
The Court has found that class action treatment is the superior method for the fair and efficient settling of this litigation. In a class action lawsuit, one or more people or entities called “class representatives” sue on behalf of people or entities who have similar claims. The people and entities together are a “class” or “class members.” A court must determine if it will allow the lawsuit to proceed as a class action. If it does, a trial of the claims then decides the lawsuit for everyone in the class, or the Parties may settle without a trial. The Parties here have agreed to, and the Court has preliminarily approved, a settlement that includes two national classes of TPPs who reimbursed for GSK Covered Drugs. You could be a member of one or both of these Classes.

4. Who qualifies as a Third-Party Payor?
A TPP is an entity that is:

(a) A party to a contract, issuer of a policy, or sponsor of a plan, and

(b) At risk, under such contract, policy, or plan, to pay or reimburse all or part of the cost of prescription drugs dispensed to covered natural persons.

TPPs include insurance companies, union health and welfare benefit plans and self-insured employers. Entities with self-funded plans that contract with a health insurance company or other entity to serve as a third-party claims administrator to administer their prescription drug benefits can qualify as TPPs. Third-party claim administrators may also file a claim on behalf of a self-funded plan if the third-party claim administrator has legal authority and authorization from the self-funded plan to do so. A non-Medicaid state or local government entity that made AWP-based prescription drug payments as part of a health benefit plan for their employees also qualifies as a TPP under the Proposed Settlement, but only with respect to such AWP-based payments.

5. Why is there a Proposed Settlement?
A settlement is the resulting agreement between a plaintiff and defendant following extended negotiation in a case set for trial. Settlements conclude litigation but are not a result of the court ruling in favor of either the plaintiff or defendant. The settlement enables both parties to avoid the cost and risk of a trial, and ultimately establish a just, fair and final resolution that is best for all involved. The class representatives and their attorneys make the final determination that the settlement is the best result for all class members. The Court will then review the terms of the proposed settlement and hold a hearing on the fairness and adequacy of the settlement to the class. If the Court approves the settlement, then the defendants are released from any liability based upon the alleged illegal behavior forming the basis of the complaint.

6. How do I know if I am included in the Proposed Settlement?
Unless you exclude yourself as described in Question 11 of this notice, you will be included in the Proposed Settlement if you are a member of one or both of the Classes described below:

You are a member of the MediGap TPP Class if you:

Made reimbursements for all or part of your insured’s 20% co-payment under Medicare Part B for a Covered Drug between January 1, 1991 and January 1, 2005,

You are a member of the Private Payor TPP Class if you:

Reimbursed for a GSK Covered Drug outside of Medicare Part B based on a contract that uses AWP as a reimbursement benchmark between January 1, 1991 and August 10, 2006.

Excluded by definition from the MediGap TPP Class and the Private Payor Class are: (1) the United States government and its agencies and departments, and all other governmental entities that made payments pursuant to any state’s Medicaid program; (2) the Independent Settling Health Plans (ISHPs), as defined in Paragraph 2(w) of the Settlement Agreement; and (3) all federal, state or local governmental entities, except for the following, which are not excluded from the Medigap TPP or Private Payor Classes: (a) non-Medicaid state or local government entities that made AWP-based prescription drug payments as part of a health benefit plan for their employees, but only with respect to such payments, and (b) other non-Medicaid state government agencies or programs of the Participating States and of the Additional Participating States (as defined in the Settlement Agreement), if any, except that such agencies and programs in New York and Connecticut are excluded.

7. What does the Proposed Settlement provide?
GSK has entered into a Proposed Settlement with the Plaintiffs and has agreed to pay $70 million to settle these and other related claims. A $4.5 million payment to certain State Attorneys General as well as attorneys’ fees and the costs of administering the Proposed Settlement will be deducted from the Settlement Fund before distributions to Class Members.

  • 30% of the remaining fund will be distributed in cash to consumer Class Members who paid for all or part of the cost of the drugs and submit a valid claim form.
  • 70% of the remaining fund will be set aside to pay the claims of insurer Class Members (sometimes referred to as “Third-Party Payor Class Members” or “TPP Class Members”) who have submitted a valid claim and a separate and independent group of TPPs (referred to as the “Independent Settling Health Plans” or “ISHPs”) who have agreed to settle their claims against GSK for a portion of the Settlement funds.

The Court must approve the distribution of the Settlement Fund.

8. How does a TPP Class Member file a claim?
Attached to this Notice is a TPP claim form. TPP Class Members must fill out the TPP claim form and submit it to the Claims Administrator, postmarked on or before May 28, 2007, and addressed to:

GSK AWP Litigation Administrator
c/o Complete Claim Solutions, LLC
P.O. Box 24743
West Palm Beach, FL 33416

As part of their claim, each TPP Class Member shall be required to certify that they are a TPP Class Member and they have not included claims on behalf of any TPP Class Member that are readily identifiable as having been based on a reimbursement standard other than AWP, and must provide the Claims Administrator with the total amount of their expenditures for each GSK Covered Drug during the period from January 1, 1999 to December 31, 2003. This period is substituted for claims associated with the full Class Period in recognition of the difficulty TPPs have in accessing claims data that is older and likely not kept electronically or on current electronic systems. This “proxy period” shall be used to determine the payments made to each TPP Class Member in accordance with the procedures set forth herein.

In order to validate their claim for payment associated with the GSK Covered Drugs for which they seek payment from the Proposed Settlement, TPP Class Members with claimed purchases for all GSK Covered Drugs during the proxy period that exceed $300,000.00 in total are required to submit electronic claims documentation with their claim. The form and data required to be submitted are delineated in the attached TPP Claim Form. Those TPPs whose claimed purchases for all Covered Drugs are $300,000.00 or less need not submit electronic claims documentation with their claim but must furnish such claims documentation upon request of the Claims Administrator.

The total amount of a TPP Class Member’s expenditures for each drug will be multiplied by the specific “Recognized Claim Percentage” or “RCP” for each drug in order to determine the amount of the TPP’s recognized claim for that particular drug. The RCP for each GSK Covered Drug varies. TPP Class Members do not need to multiply their expenditures by the RCP, that will be done by the Claims Administrator.

The RCPs for each GSK Covered Drug are listed below:

 
Drug Name
Dosages
Recognized Claim Percentage
GSK Category A Drugs Kytril Injection
(granisetron HCL)		 Injection: 1mg/ml
50%
Zofran Injection
(ondansetron HCL)		 Injection: 2mg/ml
Injection (Pre-mixed): 32mg/50ml; 4mg/50ml
50%
   
GSK Category B Drugs Alkeran
(melphalan)		 Injection: 50mg
Tablets: 2mg
5%
Imitrex
(sumatriptan)		 Injection: 12mg/1ml (6mg/0.5ml)
5%
Kytril Tablets
(granisetron HCL)		 Tablets: 1mg
5%
Lanoxin
(digoxin)		 Injection: 0.5mg/2ml; 0.1mg/ml
5%
Myleran
(busulfan)		 Tablets: 2mg
5%
Navelbine
(vinorelbine tartrate)		 Injection: 10mg/ml; 50mg/5ml
5%
Retrovir
(zidovudine)		 IV Infusion: 10mg/ml
5%
Ventolin
(albuterol) 		Inhalation: 0.083% 3ml; 0.5% 5mg/ml
5%
Zofran Orals
(ondansetron HCL)		 Tablets: 4mg; 8mg; 24mg
Solution: 4mg/5ml
ODT: 4mg; 8mg
5%
Zovirax
(acyclovir)		 Powder for Injection: 500mg; 1000mg
5%
Zantac
(ranitidine HCL)		 Injection: 25 mg/ml
Injection (Pre-mixed): 50mg/50ml; 50mg/100ml
5%


9. What am I giving up If I do nothing and stay in the Classes?
If you do nothing, you will be included in the Classes. You will be bound by the terms and conditions of the Proposed Settlement. You will not be able to pursue any other lawsuit against GSK concerning the claims alleged in this lawsuit. If the Proposed Settlement is approved, Plaintiffs claims against GSK will be “released.”

The Proposed Settlement provides that the claims against GSK as set forth in the lawsuit will be released and members of the Classes will never be able to file a lawsuit for any claim related to this lawsuit. All Class Members agree that they will not seek to file a claim against any GSK Releasee based, in whole or in part, on any of the claims in the lawsuit.

In addition, once the Settlement Agreement is approved, each Class Member expressly agrees to release any and all provisions, rights and benefits provided by § 1542 of the California Civil Code, which reads:

Section 1542. General Release; extent. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor;

Class Members also expressly agree to release any and all provisions, rights and benefits provided by any law or any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to § 1542 of the California Civil Code.

Class Members agree to forever release all claims even if they later discover new facts regarding the claims in the lawsuit. This includes any claims related to the subject matter of the lawsuit whether known or unknown, suspected or unsuspected, contingent or non-contingent. All claims related to the subject matter of the lawsuit will be released forever whether or not the facts were concealed or hidden, without regard to the subsequent discovery or existence of such different or additional facts.

Each Class Member also expressly agrees to release any and all Released Class Claims it may have against Defendants under § 17200, et seq., of the California Business and Professions Code. This includes claims relating to any drug price published by any commercial price reporting service, or provided by any GSK Releasee to any such commercial price reporting service (including, but not limited to, AWP, SLP, WAC, NWP, WPP and Direct Price). Each Class Member also expressly agreees to forever release any claims regarding any marketing activity relating to any such price, such as any reference to the difference between (1) a price paid and (2) any reported price or reimbursement rate based on such a reported price, arising from the facts alleged in the MDL Complaints concerning the GSK Covered Drugs.

10. What do I do if I don’t want to be in the Proposed Settlement?
If you don’t want to be in either or both of the Classes and you want to keep the right to sue GSK about the same claims on your own, you must take steps to get out of the Classes. This is called excluding yourself. By excluding yourself, you keep the right to file your own lawsuit or join another lawsuit against GSK about the claims in this lawsuit. If you exclude yourself from the Classes, you will not be able to file a claim for money or benefits and you will not be in the Proposed Settlement.

11. How do I exclude myself from the Classes?
To exclude yourself from one or more of the Classes, you must send a letter signed by you that includes all of the following:

  • Your name, organization, address, and telephone number;
  • The name and number of the lawsuit: In re: Pharmaceutical Industry Average Wholesale Price Litigation, Docket No. 01-CV-12257-PBS, MDL No. 1456;
  • If you have hired your own lawyer, the name, address, and telephone number of your lawyer; and
  • A statement that you want to be excluded from either or both of the Classes, specifying which class you seek to exclude yourself from.

Your exclusion letter must be mailed first class, received no later than May 27, 2007, to:

GSK AWP Litigation Administrator
c/o Complete Claim Solutions, LLC
P.O. Box 24743
West Palm Beach, FL 33416

Please remember that you can’t exclude yourself by phone or by sending an email.

12. Can I object to or comment on the Proposed Settlement?
If you have comments about, or disagree with, any aspect of the Proposed Settlement, including the requested attorneys’ fees or the expense reimbursement plan, you may express your views to the Court through a written response to the Proposed Settlement. The written response should include your name, address, telephone number and a brief explanation of your reasons for objection. The document must be signed to ensure the Court’s review. The response must be received on or before June 22, 2007 and mailed to:

Clerk of the Court
John Joseph Moakley U.S. Courthouse
1 Courthouse Way
Suite 2300
Boston, MA 02210		   Steve W. Berman
Hagens Berman Sobol Shapiro LLP
1301 Fifth Avenue, Suite 2900
Seattle, WA 98101
Counsel for Nationwide AWP
Payor Classes   		 Frederick G. Herold
Dechert LLP
1117 California Avenue
Palo Alto, CA 94304
Counsel for GlaxoSmithKline

In addition, your document must clearly state that it relates to the following Civil Action Number:
01-CV-12257-PBS, MDL No. 1456

13. What is the difference between objecting to the Proposed Settlement and excluding myself from the Proposed Settlement?

An objection to the Proposed Settlement is made when you wish to remain a Class Member and be subject to the Proposed Settlement, but disagree with some aspect of the Proposed Settlement. An objection allows your views to be heard in Court. In contrast, exclusion means that you no longer are a Class Member and ultimately do not want to be subject to the Proposed Settlement’s terms and conditions. Once excluded, you lose any right to object to the Proposed Settlement or to the attorneys’ fees because the case no longer affects you.

14. Do I have a lawyer representing my interests in this case?
Yes. The Court has appointed the following law firms to represent you and other Class Members:

Hagens Berman Sobol Shapiro LLP
www.hagens-berman.com
1301 Fifth Avenue, Suite 2900
Seattle, WA 98101

           and

One Main Street, 4th Floor
Cambridge, MA 02142

Mark H. Edelson
Edelson & Associates LLC
45 West Court Street
Doylestown, PA 18901

 Spector Roseman & Kodroff, PC
www.srk-law.com
1818 Market Street, Suite 2500
Philadelphia, PA 19103

Wexler Toriseva Wallace LLP
www.wtwlaw.us
One North LaSalle St., Suite 2000
Chicago, IL 60602

The Haviland Law Firm, LLC
www.HavilandLaw.com
740 S. Third Street
Third Floor
Philadelphia, PA 19147

These lawyers are called Class Counsel. You won’t be charged personally for these lawyers, but they will ask the Court to award them a fee to be paid out of the Settlement Fund. More information about Class Counsel and their experience is available at the Web sites listed above.

15. How will the lawyers be compensated?
Class Counsel will request that the Court award attorneys’ fees not to exceed thirty-three and a third percent (33.33%) of the Proposed Settlement Fund, plus reimbursement of expenses. The Court, at its own discretion, may award more or less than these requested amounts without further notice to the Class Members. Again, if you choose to hire your own attorney, you will be responsible for that attorney’s fees and expenses.

16. Should I get my own lawyer?
You don’t need to hire your own lawyer, but if you want your own lawyer to speak for you or appear in Court, you must file a Notice of Appearance (see Question 20 to find out how to submit a Notice of Appearance). If you hire a lawyer to appear for you in the lawsuit, you will have to make your own arrangement for that lawyer’s compensation.

17. Payments to Class Representatives
The Court may award payments to the individuals and entities who served as Class Representatives in this case, and any such payments will come out of the class Settlement Fund. The lawyers for the Class will request the Court to award a total of $100,000 as payments to TPP Class representatives in this case and $25,000 as payments to Consumer Class representatives in this case.

18. When and where will the Court decide on whether to grant final approval of the Proposed Settlement?
The Court will hold a Final Approval Hearing on July 19, 2007 at 2:00 p.m. to consider whether the Proposed Settlement is fair, reasonable, and adequate. At the Hearing, the Court will decide whether to approve the Proposed Settlement and the motion for attorneys’ fees and expenses. If comments or objections have been received, the Court will consider them at this time.

Note: The hearings may be postponed to a different date without additional notice. Updated information will be posted on the GSK Proposed Settlement Web site at www.GSKSettlement.com.

19. Must I attend the Final Approval Hearing?
Attendance is not required, even if you properly mailed a written response. Class Counsel is prepared to answer the Court’s questions on your behalf. If you or your personal attorney still want to attend the hearing, you are more than welcome at your expense. However, it is not necessary that either of you attend. As long as the objection was received before the deadline the Court will consider it.

20. May I speak at the Final Approval Hearing?
If you want your own lawyer instead of Class Counsel to speak at the Final Approval Hearing, you must give the Court a paper that is called a “Notice of Appearance.” The Notice of Appearance should include the name and number of the lawsuit, and state that you wish to enter an appearance at the Fairness Hearing. It also must include your name, organization, address, telephone number, and signature. Your “Notice of Appearance” must be received on or before June 22, 2007. You cannot speak at Hearing if you asked to be excluded from the Proposed Settlement Class.

The Notice of Appearance must be filed with the Court at the following address:

Clerk of the Court
John Joseph Moakley U.S. Courthouse
1 Courthouse Way
Suite 2300
Boston, MA 02210		   Steve W. Berman
Hagens Berman Sobol Shapiro LLP
1301 Fifth Avenue, Suite 2900
Seattle, WA 98101
Counsel for Nationwide AWP
Payor Classes   		 Frederick G. Herold
Dechert LLP
1117 California Avenue
Palo Alto, CA 94304
Counsel for GlaxoSmithKline

The Notice of Appearance must be filed using the following Civil Action Number:
01-CV-12257-PBS, MDL No. 1456

20. Where do I obtain more information?
More details are in the Complaint filed by Class Counsel, and the other legal documents that have been filed with the Court in this lawsuit. You can look at and copy these legal documents at any time during regular office hours at the Office of the Clerk of Court, John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Suite 2300, Boston, Massachusetts 02210 or by visiting the appropriate links on this website.