Texas Sues Two Flu Vaccine Distributors

October 21, 2004
Texas Attorney General Greg Abbott filed suit today against two distributors of the scarce flu vaccine for allegedly charging exorbitant prices to hospitals in Houston, Dallas and Sherman, in violation of state law.

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The Attorney General sued ASAP Meds Inc., dba Meds-Stat, of Fort Lauderdale, Florida, and Dubin Medical Inc. of San Diego, California for unconscionable pricing of the critical vaccine and for perpetrating fraud in the face of a health care challenge in Texas. The suit was filed in Harris County District Court and comes after an investigation the Attorney General began on Monday.

Connecticut also filed suit against Meds-Stat today. The company faces similar charges in Florida and Kansas.

“The Texas health care community relies on the professional conduct of those who manufacture and distribute medications that may mean the difference between life and death for some people,” said Attorney General Abbott.

“The companies allegedly marked up this critical vaccine by more than 1,000 percent for sale to providers. This is an outrageous scheme in light of the challenge we face in Texas in getting this vaccine to those who need it most,” Abbott said.

The suit contends the companies offered 10-dose vials, which would typically cost between $65 and $80 each, for as much as $950 and demanded cash on delivery. The Attorney General’s suit asks the court to order the companies to relinquish all profits realized from this unconscionable pricing scheme against providers. It also seeks civil penalties under the Texas Deceptive Trade Practices Act, as well as temporary and permanent injunctions.

The Attorney General provided sworn affidavits from pharmacy directors and purchasers at hospitals in Harris, Dallas and Grayson counties. The hospitals included Ben Taub Hospital in Houston, Wilson Jones Medical Center in Sherman, and Charlton Methodist Hospital in Dallas.

The hospitals said they were asked to pay between $400 and $950 for a 10-dose vial. The price was considered unaffordable at Methodist Charlton, a charity institution, which chose not to purchase the vaccine. As a result, the hospital now has no flu vaccine available for critically ill patients or essential health care providers.

In Connecticut, Attorney General Richard Blumenthal sued Meds-Stat, charging it inflated vaccine prices as high as $900 per vial – more than 10 times the standard market value.Blumenthal's lawsuit also alleges that Meds-Stat illegally sold or offered to sell the flu vaccine in Connecticut without obtaining a certificate of authority to do business.

"As vicious as the flu virus is the human virus of greed exploiting it – huge price hikes, putting our most vulnerable citizens at even greater risk," Blumenthal said. "This lawsuit is a shot in the arm – strong medicine and a simple message for anyone profiteering or price gouging in a public health emergency."

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