Healthcare Industry News:  DuoNeb 

Biopharmaceuticals Litigation

 News Release - September 11, 2006

Statement from Dey, L.P. Regarding Pricing Litigation by the U.S. Department of Justice

NAPA, Calif., Sept. 11 (HSMN NewsFeed) -- Dey, L.P. unequivocally denies any wrongdoing in the pricing or marketing of its generic or branded pharmaceutical products. In response to claims filed by the Department of Justice (DOJ), DEY maintains that it has consistently participated legally and ethically within national and state reimbursement systems. DEY intends to defend itself vigorously against the DOJ's claims.



"When virtually an entire industry is sued -- as has been the case with the pricing lawsuits that have been filed around the country by dozens of attorneys general -- it indicates that the real issue is not the industry's conduct, but rather the government's own reimbursement system," said John M. Kling, Senior Vice President, Legal, at Dey, L.P. "DOJ's claims against DEY derive from a government reimbursement model that relied on published Average Wholesale Prices (AWP). For more than three decades, the Federal and State governments have known about the AWP-based reimbursement model, understood its limitations, and accepted its use as a way to gain the voluntary participation of pharmacists and other healthcare providers in the public healthcare entitlement program Medicaid. The 'spread' between dispensers' acquisition costs and Medicaid reimbursements provided the mechanism whereby pharmacists and other healthcare professionals could recapture their actual dispensing costs.

"The problems with the AWP-based reimbursement model are a primary reason why Congress and the Administration reformed the pricing system under the Medicare Modernization Act of 2003. Many in the pharmaceutical industry, including DEY, supported those reforms."

With reference to the suit now being brought by the DOJ, Kling continued, "We have had an ongoing, open dialogue with the Department of Justice for a number of months now, but despite our best efforts to come to a satisfactory resolution out of court, the government's views of how pharmaceutical companies distribute products, how providers and pharmacists dispense them and are reimbursed within the AWP-based system, and what, if any, negative impact on reimbursement exists, are sufficiently different from ours that they have decided to move forward with legal action. As a result, we have no choice but to vigorously defend our interests in court."

About Dey, L.P.

Dey, L.P. is a specialty pharmaceutical company focused on the development, manufacturing and marketing of prescription drug products for the treatment of respiratory diseases and respiratory-related allergies. Since 1978, patients have benefited from DEY's commitment to innovative and affordable health care solutions. The Web sites for DEY include http://www.dey.com, http://www.accuneb.com, http://www.curosurfusa.com, http://www.DuoNeb.com, and http://www.epipen.com. DEY is an affiliate of Merck KGaA, Darmstadt, Germany.


Source: Dey, L.P.

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