Professional Documents
Culture Documents
2017 T1DF Test Strips Action - Complaint (Case 2:17-cv-00803 Filed by Keller Rohrback On May 24, 2017)
2017 T1DF Test Strips Action - Complaint (Case 2:17-cv-00803 Filed by Keller Rohrback On May 24, 2017)
14 v.
23 Defendants.
24
25
26
2
I. INTRODUCTION ........................................................................................................ 1
3
II. PARTIES ................................................................................................................... 11
4
A. Plaintiffs. ........................................................................................................ 11
5
B. Defendants. ..................................................................................................... 15
6
III. JURISDICTION AND VENUE.................................................................................. 18
7
IV. FACTUAL ALLEGATIONS...................................................................................... 20
8
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- iii TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 5 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- iv TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 6 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-v TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 7 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- vi TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 8 of 274
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- vii TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 9 of 274
1 I. INTRODUCTION
2 1. Nearly 30 million people, 9.3% of the U.S. population, have diabetes.1 Failure to
3 properly control blood sugar levels can have severe consequences for diabetes patients, including
4 damage to internal organs, nerves, eyes, feet, and skin.2 For people with diabetes, not monitoring
5 blood sugar levels can lead to too little insulin in the system (hyperglycemia) 3 or too much
6 insulin being injected into their system (hypoglycemia), both of which can be fatal.4 Diabetes-
7 related complications are the seventh leading cause of death in the United States.5
8 2. The financial costs of living with diabetes have ballooned recently.6 Of the nearly
9 30 million diabetes patients in the United States, approximately six million rely on daily insulin
10 treatments to survive7 and almost twelve million more take oral medication to control their blood
11 sugar.8 To properly administer insulin or other medications and manage diabetes, patients must
12 monitor their blood glucose throughout the day, which they do by testing with blood glucose
13 monitors and single-use blood glucose test strips. This action is about the inflated price of the
16 abuses. For example, the price of insulin has soared over the last decadea prescription that
17 might have cost a consumer $25 in the past, now costs between $250 and $450. As recent articles
18 have revealed, the prices for insulin have surged in part because of powerful middlemen
19 pharmacy benefit managers, or PBMswho negotiate the prices of drugs and other medical
20
21 1
Centers for Disease Control and Prevention [hereinafter CDC], National diabetes statistics report: estimates of
diabetes and its burden in the United States, CDC (2014),
22 https://www.cdc.gov/diabetes/pubs/statsreport14/national-diabetes-report-web.pdf.
2
Id. at 5.
23 3
Diabetic ketoacidosis, Mayo Clinic: Diseases and Conditions, http://www.mayoclinic.org/diseases-
conditions/diabetic-ketoacidosis/basics/definition/con-20026470 (last visited Mar. 10, 2017).
4
24 Gita Shafiee, et al., The importance of hypoglycemia in diabetic patients, 11 J. OF DIABETES & MED. DISORDERS
17, 1 (2012).
5
25 CDC, supra note 1, at 7.
6
Allison Tsai, The Rising Cost of Insulin, DIABETES FORECAST, (Mar. 2016),
26 http://www.diabetesforecast.org/2016/mar-apr/rising-costs-insulin.html.
7
See CDC, supra note 1, at 5.
8
Id.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-1 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 10 of 274
1 products on behalf of their clients, insurers.9 PBMs profit from rebates and other payments
2 received from manufacturers in exchange for making the manufacturers prescription products
3 available to their clients. In the case of insulin, manufacturers have artificially increased the list
4 price for the drug to accommodate PBM rebateswhich are estimated to comprise up to 50
6 4. Like the skyrocketing price of insulin, the list prices of glucose test stripsthe
7 focus of this caseare artificially inflated as a result of a scheme and enterprise among four
8 dominant manufacturers (collectively, as defined below, the Manufacturer Defendants) and the
9 three largest PBMs (collectively, as defined below, the PBM Defendants). In this Test Strip
10 Pricing Scheme, the Manufacturer Defendants set two different prices for test stripsa
11 publicly-available list price and an undisclosed lower net price that the PBMs actually pay
13 5. And, also like insulin, test strips are a big business. In 2015, the global glucose
14 monitoring and diabetes management market was valued at over $10 billion.11 Every year,
15 diabetes patients in the United States spend close to $4 billion on the disposable strips.12 As
16 shown in the below figure, test strips comprise a significant component of the global diabetes
17 care market:
18
19
20
21
22
23
9
24 See, e.g., Kasia Lipska, Break Up the Insulin Racket, N.Y. TIMES (Feb. 20, 2016),
https://www.nytimes.com/2016/02/21/opinion/sunday/break-up-the-insulin-racket.html.
25 10 Id.
11
Press Release, Kalorama, Report: Glucose Monitoring Market tops $10 Billion, (Sep. 30, 2015, 11:12),
26 12 http://www.prnewswire.com/news-releases/report-glucose-monitoring-market-tops-10-billion-300151264.html.
A Gray Market For Diabetes Supplies Highlights The Cost of Care, NATIONAL PUBLIC RADIO (Jan. 31, 2017),
http://kbia.org/post/gray-market-diabetes-supplies-highlights-cost-care#stream/0.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-2 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 11 of 274
9
10
11
12
13
14
15 6. To understand the Test Strip Pricing Scheme, it is necessary to understand the role
16 of PBMs in the pharmaceutical supply chain. The PBM Defendants serve as both middlemen and
17 gatekeepers between drug and medical supply manufacturers on the one hand, and health
18 insurers and patients on the other. For the PBM Defendants, business is booming. Combined,
19 they report more than $200 billion a year in revenue.14 They control over 80% of the industry,
20 administering and managing pharmacy benefits for over 180 million insureds.15
21 7. PBMs are supposed to negotiate lower prices for their clients, health insurers and
22 plan administrators. Using the sheer volume of their clients as leverage, the PBM Defendants set
23 up exclusionary tiered formulariesranked lists of drugs and other medical products, such as
24
13
25 Diabetes: Outlook for Monitoring, Management, and Technology Development, MEDMARKET DILIGENCE, LLC
(April 18, 2012), https://blog.mediligence.com/2012/04/18/diabetes-outlook-for-monitoring-management-and-
26 14 technology-development/.
Lipska, supra note 9.
15
Id.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-3 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 12 of 274
1 test strips, where some cheaper and more effective products are supposed to be placed into lower
2 tiers, generally with lower cost-sharing amounts due from patients. Plan administrators and
3 health insurers rely on PBMs formularies to calculate how much of their insureds costs for
4 formulary products they will cover. Medical products that are in the lower, preferred, formulary
7 exclude from its formulary the more expensive versionagain, supposedly based on the price of
8 the product for consumers. Health plans that use a PBMs formulary either will not reimburse
9 members for the purchase price of products that are excluded from the formulary or will require
10 members to pay a larger coinsurance amount based on the list price rather than the actual net
11 price that the PBM paid. Thus, exclusionary formularies allow PBMs, including the PBM
12 Defendants, to push patients toward certain brands over others. This gives the PBM Defendants
14 9. While the PBM Defendants could use this market power to drive down the prices
15 for medical products by forcing manufacturers to compete on price for formulary placement,
16 instead they and the Manufacturer Defendants have figured out a way to game the system for
17 their mutual benefit. To gain formulary access, the Manufacturer Defendants have inflated their
18 list prices and then rebate a significant portion of the list price back to the PBM Defendants.
19 The rebates are provided under a variety of labelsdiscounts, credits, concession fees, etc. 16
20 Regardless of the term used to describe them, they are a quid pro quo for formulary inclusion or
21 preferential placement. In the context of this complaint, rebates should be understood to include
22 all payments or financial benefits of any kind conferred by the Manufacturer Defendants to the
24 intermediaries.
25
26 16
See, e.g., Linda Cahn, Dont Get Trapped By PBMs Rebate Labeling Games, MANAGED CARE
(Jan. 2009), https://www.managedcaremag.com/archives/2009/1/don-t-get-trapped-pbms-rebate-labeling-games.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-4 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 13 of 274
1 10. The result of this rebating scheme is a vast difference between the list price
2 reported by the Manufacturer Defendants and the net price obtained by the Manufacturer
4 11. The PBM Defendants may pass a portion of the rebates to their major insurer
5 clients, some of which are owned by or affiliated with them, and pocket the rest. The higher the
6 rebate, the more the PBM Defendants can pocket. The total amount and nature of the rebates, the
7 amount that the PBM Defendants pocket, and the amount that the PBM Defendants pass through
9 12. This rebate scheme creates the best of both worlds for the Defendants. The PBM
10 Defendants obtain large rebates in exchange for granting access to the exclusionary formularies,
11 increasing their take, and the Manufacturer Defendants maintain their profits by increasing their
12 market share for sale of the rebated strips while charging the inflated list price to the over-the-
13 counter market. This is because the net price for test stripsthe amount that the PBM
15 13. The result of this scheme is a wide gap between the price paid by the PBM
16 Defendants for test strips (i.e., the net realized price actually received by the Manufacturer
17 Defendants), and the publicly available manufacturer list price. And, by dictating most glucose
18 meter selections, the PBM Defendants create a captive market of diabetes patients who will
20 14. This scheme has allowed the Manufacturer Defendants to do something that
21 would be impossible for a product that is subject to normal market conditions: even though
22 multiple manufacturers produce test strips, the Manufacturer Defendants have maintained
23 dominance of the test-strip market while increasing prices on both the insured and over-the
24 counter retail markets. For example, Roche raised the average wholesale price for a box of 51
25 Accu-Chek Compact Plus strips from $72.56 in February 2013 to $79.45 the next year, and to
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-5 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 14 of 274
1 $87.40 in 2015.17 The average wholesale prices for test strips manufactured by the other
4 prices for medical productslist the Manufacturer Defendants test strips as the preferred or
5 even exclusive brands on formularies because this scheme generates profits for the PBM
6 Defendants without actually requiring the Manufacturer Defendants to lower their prices. This is
7 the same tactic that manufacturers and PBMs use to artificially inflate the list price of insulin and
9 16. And diabetes patients have no choice but to play into the Defendants Test Strip
10 Pricing Scheme if they need dependable test strips that their insurance will cover. Although
11 cheaper blood glucose monitors are available, not all monitors and test strips are equally
12 accurate. A study of seven commonly used monitoring systems found that only three of the
13 systems met accuracy criteria of the International Organization for Standardization.18 Moreover,
14 insured patients can use the considerable expense of test strips to contribute to paying down their
15 annual deductible only if they purchase the brand that their insurance covers.
16 17. The Manufacturer Defendants list price increases for these strips appear to
17 correlate to the time when the Centers for Medicare & Medicaid Services (CMS) implemented
18 the Competitive Bidding Program (CBP) for diabetes supplies. The CBPs purpose is to lower
19 consumer costs for medical equipment. In 2011, CMS launched the CBP in nine markets for
20 diabetes supplies, including test strips.19 At that time, single payment rates for test strips obtained
21 through mail order were reduced from $34 to $14 per box.20 In 2013, when CMS implemented
22 the national launch of the CBP for diabetes testing supplies, reimbursement for test strips was
23
17
From Medi-Span historical and current average wholesale price data.
18
24 Ronald L. Brazg, et al., Performance Variability of Seven Commonly Used Self-Monitoring of Blood Glucose
Systems: Clinical Considerations for Patients and Providers, J. OF DIABETES SCI. AND TECH., Vol. 7, Iss. 1 (Jan.
25 2013).
19
See Gary A. Puckrein, et al., Impact of CMS Competitive Bidding Program on Medicare Beneficiary Safety and
26 Access to Diabetes Testing Supplies: A Retrospective, Longitudinal Analysis, 39 DIABETES CARE at 563 (April
2016).
20
Id. at 564.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-6 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 15 of 274
1 reduced from about $35 to $10.41 per 50-test-strip box, when acquired through either mail order
2 or retail.21
4 profits for test strips, which are based on a business model of practically, or actually, giving
5 meters away so that people with diabetes are locked into buying that brand of strips. 22 In 2013,
6 for example, Abbott reported that its worldwide diabetes care sales decreased by 3.6 percent
8 bidding in the United States.23 In an investor call held in 2014, Abbott explained that its strategy
9 in light of the CBP was to focus on gaining a market share in other segments.24 However, it is
10 apparent that rather than competing by lowering net prices on test strips, the Manufacturer
11 Defendants merely increased the spread between list and net prices, raising list prices to gain
12 favorable formulary access from the PBM Defendantsat the expense of diabetes patients.
13 19. The PBM Defendants tout their market power to drive down prices for
14 prescription products. They boast about the rebates or discounts for which they bargain with
15 manufacturers. The story they tell is that these rebates and discounts are obtained for the benefit
16 of patients since they purportedly result in lower costs for prescription products. For example,
17 Express Scripts claims, [w]e put medicine within reach of patients while helping health benefit
18 providers improve access to prescription drugs and make them more affordable. . . .25
19 20. OptumRx also claims that its PBM businesses have dedicated units that help
20 improve overall health system performance through optimizing care quality, reducing costs and
22
23
21
Id. at 570.
22
24 Arundhati Parmar, Whos J&Js stepchild? Its consumer diabetes device business, MEDCITYNEWS (Jan. 31, 2017,
6:14 PM), http://medcitynews.com/2017/01/whos-jjs-stepchild-consumer-diabetes-device-business/.
25 23 Press Release, Abbott Investors, Abbott Reports Fourth-Quarter and Full-Year 2013 Results (Jan. 22, 2014),
http://www.abbottinvestor.com/phoenix.zhtml?p=irol-eventDetails&c=94004&eventID=5079517.
26 24 Q1 2014 Abbott Laboratories Earnings Call (Apr. 16, 2014), recording available at
https://www.earningscast.com/ABT/20140416.
25
Express Scripts Holding Company, Annual Report (Form 10-K) (Dec. 31, 2016).
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-7 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 16 of 274
1 capabilities in data and analytics, pharmacy care services, population health, health care delivery
3 21. CVS Health Corp. contends, [w]e assist our clients in designing pharmacy
4 benefit plans that help minimize the costs to the client while helping improve health outcomes . .
5 . .27
6 22. But the story that the PBM Defendants tell is far from the whole truth. They
7 obtain rebates and discounts, but neglect to reveal the large portion of the rebates that they
8 pocket. They also neglect to reveal that their formulary decisions are based on the amount of the
9 spread they obtain from the rebates and other payments from manufacturers. And they neglect to
10 reveal that the consequence of this scheme is higher costs for patients, whose payments at the
11 pharmacy point of sale are calculated based on the unrebated list price of medical products, not
12 the lower price paid by the PBMs after all rebates and other financial benefits received by the
13 PBMs from the Manufacturers and other third parties are taken into account. Indeed, the PBM
14 Defendants misrepresent the role they play in the supply chain, and their impact on the prices
15 actually paid by consumers. The PBMs are avaricious middlemen, with a stranglehold on the
16 medical supply chain. Their scheme to sell formulary access for rebates drives up the cost of
17 prescription drugs and other medical products for the people who need to use them to stay alive.
18 23. The Manufacturer Defendants are equally at fault. Their conduct deprives patients
19 of a fair price for glucose test stripsa price that would result from the operation of normal
20 market forces. They maintain the ability to sell test strips to the millions of Americans who
21 depend on them, without having to lower the real, net prices to gain market share. They
22 bargain for market share by providing ever-larger rebates to PBMs and entering into exclusive
23 relationships with those PBMs, inflating the prices paid by consumers in order to preserve their
24 net realized price or sales volumes. Their refusal to disclose their net realized prices for test
25
26 26
UnitedHealth Group, Annual Report (Form 10-K) (Dec. 31, 2016).
27
CVS Health Corp., Annual Report (Form 10-K) (Dec. 31, 2016).
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-8 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 17 of 274
1 strips and the web of confidentiality agreements they have created and/or participated in with
2 PBMs have been critical to the furtherance of the Test Strip Pricing Scheme.
3 24. Diabetes patients who rely on test strips to maintain safe blood glucose levels are
4 the victims of the Defendants Test Strip Pricing Scheme. These patients are burdened with
5 exorbitant out-of-pocket expenses for test strips because their payment obligations are based on
6 the list prices, not the secret net prices provided to the PBM Defendants. This is the case
7 regardless of whether these patients are uninsured and paying the entire list price, or whether
8 they are insured and paying large deductibles, coinsurance, high-tier copayments, or paying the
9 full list price for the extra test strips they need that beyond the number allowed by their
10 insurance. All of these patients are making payments based on the inflated list price.
12 Pricing Scheme is terrible. Many insurance companies limit the amount of test strips per day that
13 they will cover to three or four, leaving patients to pay for any extra test strips out-of-pocket.28
14 Some diabetes patients are unable to afford the number of strips that their physicians recommend
15 and therefore do not test their blood sugar levels as frequently as they shouldothers stop
17 26. The demand for affordable strips in the most commonly used brands is so great
18 that a gray market exists of unauthorized resellerspeople who purchase unused strips from
19 diabetes patients and resell them to others. Test strips contain enzymes and must be stored at
20 controlled temperatures, but diabetes patients who turn to the dubious gray market cannot
21 know whether the strips were properly stored. As the FDA recently warned, pre-owned test strips
22 could be dangerous: A lack of proper storage or using expired strips could put you at risk for
23 getting incorrect results from your glucose meter. And incorrect results can put you at risk for
24
28
25 Kathryn Doyle, Test strip supply linked to better diabetes care, CHICAGO TRIBUNE (Feb. 07, 2013),
http://articles.chicagotribune.com/2013-02-07/lifestyle/sns-rt-us-test-strip-supply-linked-to-better-diabetesbre9-
26 29 20130207_1_sugar-levels-blood-sugar-a1c.
Tom Avril, Paper money: Why patients pay so much for strips, THE PHILADELPHIA INQUIRER (Nov. 19, 2009,
5:47 PM), http://www.philly.com/philly/health/diabetes/20091117_Why_patients_pay_so_much_for_strips.html.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
-9 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 18 of 274
1 serious health complicationsand even death.30 Because of the high cost of test strips, however,
2 some patients resort to purchasing strips that may not measure their glucose levels accurately
3 and they may be unaware of the danger the gray market strips pose to their health. If diabetes
4 patients fail to adequately monitor and control their blood sugar levels, they risk serious
5 complications such as heart disease, kidney failure, infection, blindness, coma, and
6 amputations.31
7 27. Besides the gray market, patients may turn to low-quality brands of test strips to
8 save moneywhich may put them at risk because of the less accurate nature of these products.32
9 28. This lawsuit alleges that the three largest PBMsCVS Health, Express Scripts,
10 and OptumRxviolated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18
11 U.S.C. 1961 et seq., the Employee Retirement Income Security Act of 1974 (ERISA), 29
12 U.S.C. 1001 et seq., various state consumer protection laws, and state common law, by
14 deceptive conduct, whose purpose is to unlawfully extract ever-larger portions of rebates along
15 with other paymentsPBM Kickbacksfrom the four top makers of blood glucose test
16 stripsRoche, Bayer, Abbott, and Johnson & Johnson, along with their affiliates. Plaintiffs
17 further allege that these four test-strip producers have provided the PBM Defendants increasingly
18 large rebates and kickbacks by inflating the list prices of test strips, and then have further
19 conspired with the PBM Defendants and their insurer clients to prevent disclosure of net prices
21 Scheme directly and foreseeably causes consumers to overpay for these life-saving medical
22 products. Thus, this action is brought to redress Plaintiffs injuries that flow from Defendants
23 Test Strip Pricing Schemewhich has driven up the cost of branded test strips to the substantial
25
30
Consumer Updates, How to Safely Use Glucose Meters and Test Strips for Diabetes, FDA U.S. Food & Drug
26 Administration (updated May 16, 2017), https://www.fda.gov/ForConsumers/ConsumerUpdates/ucm049051.htm.
31
CDC, supra note 1, at 5.
32
See Brazg, et al., supra note 18 at 145.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 10 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 19 of 274
1 curtail Defendants practices and provide greater transparency in test-strip pricing, as well as
2 lower prices going forward. The causes of action asserted herein allow, inter alia, the remedies
3 of monetary damages, damage multipliers, surcharge, restitution, injunctive relief, and other
4 equitable relief.
5 II. PARTIES
6 A. Plaintiffs.
7 29. Plaintiff Jeanine Prescott is domiciled in the state of Colorado. She has been
8 diagnosed with type 1 diabetes for thirty-three years. Ms. Prescott uses Bayers Contour Next
9 test strips nine times per day to check her blood glucose levels. She is currently limited to this
10 brand of strip because it is compatible with her Bayer Contour Next Link meter which is the only
11 meter that relays glucose readings from blood testing as well as her continuous glucose monitor
12 (CGM) to her insulin pump. In the past, she has used Johnson & Johnsons One Touch Ultra test
13 strips. From January 1, 2014 to June 30, 2016 and from May 1, 2017 to present, Plaintiff Prescott
14 has been enrolled in an Anthem BlueCross BlueShield Blue Priority PPO plan through her
15 husbands employer, the American Numismatic Association, for which Defendant Express
16 Scripts administers the pharmacy benefits. The plan is an employee welfare benefit health plan
17 governed by ERISA. Pursuant to the terms of the plan, she paid a $60 copay per 30-day supply
18 of Bayers Contour Next test strips. On numerous occasions, pursuant to the terms of her health
19 plan, Plaintiff Prescott paid a tier-dependent copay and/or the full price for test strips produced
20 by one or more of the Manufacturer Defendants, including Bayer and Johnson & Johnson, as
21 defined below.
22 30. Plaintiff Michael Bewley is domiciled in New York. He has type 1 diabetes and
23 uses Johnson & Johnsons One Touch Verio test strips four times per day to monitor his blood
24 glucose levels. In the past, he used Roches Accu-Chek test strips. Bewley is insured through his
25 wifes employer, HSBC, and is enrolled in the HSBCNorth America U.S. Consolidated Health
26 and Welfare Plan, for which Defendant CVS Health administers pharmacy benefits. The plan is
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 11 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 20 of 274
1 an employee welfare benefit health plan governed by ERISA. On numerous occasions, pursuant
2 to the terms of his plan, Bewley paid a copay, coinsurance, and/or the full price for the One
3 Touch Verio test strips produced by Defendants Johnson & Johnson and Roche, as defined
4 below.
5 31. From 2013 to 2016, Bewley was enrolled in the HSBC Blue Cross Blue Shield
6 PPO Plan for which Defendant CVS Health administered the pharmacy benefits. During this
7 time, Bewley was forced to pay a high copay for test strips pursuant to the terms of his plan. On
8 numerous occasions in 2016, Bewley paid a $120 copay for Johnson & Johnsons One Touch
10 32. As of January 1, 2017, Bewley is enrolled in the HSBC Blue Cross Blue Shield
11 Health Savings Plan, for which Defendant CVS Health administers the pharmacy benefits. Under
12 the terms of his plan, Bewley pays 100% of the cost of Johnson & Johnsons One Touch Verio
13 test strips until he meets his $2,600 deductible, after which the plan pays 90% of the cost. In just
14 three months, from January 2017 to March 2017, Bewley paid approximately $590 for Johnson
16 33. Plaintiff Scott Strumello is domiciled in New York. He has type 1 diabetes and
17 he uses Johnson & Johnsons One Touch Verio test strips more than six times per day to monitor
18 his blood glucose levels. Mr. Strumello enrolled in employee welfare benefit health plans for
19 which Defendants CVS Health and Express Scripts administer pharmacy benefits. On numerous
20 occasions, pursuant to the terms of those plans, Plaintiff Strumello paid a copay, coinsurance,
21 and/or the full price for test strips produced by Manufacturer Defendant Johnson & Johnson.
22 34. In the past, Mr. Strumello was insured through his employer Auriemma
23 Consulting Group, Inc., via Extensis Group, Inc., in an Aetna health care plan for which
24 Defendant CVS Health administers the pharmacy benefits. On information and belief, the plan is
25 an employee welfare benefit health plan governed by ERISA. Under the terms of the plan, Mr.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 12 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 21 of 274
1 Strumello paid 100% of the cost of Johnson & Johnsons One Touch Verio test strips until he
3 35. As of April 1, 2016, Mr. Strumello is enrolled through his spouses employer
4 Swedish Institute, Inc. in the UnitedHealthcare Oxford New York EPO Plan, for which
5 Defendant OptumRx administers the pharmacy benefits. On information and belief, the plan is
6 an employee welfare benefit health plan governed by ERISA. Under the terms of the plan, Mr.
7 Strumello pays 100% of the cost of Johnson & Johnsons One Touch Verio test strips until he
8 meets his $5,700 family deductible, after which the plan specifies a $35 copay. Mr. Strumello
9 was forced to attain pre-authorization for testing supplies in excess of his plans maximum
10 quantity of 6 test strips per calendar day. Between May 2016 and March 2017, Mr. Strumello
11 spent over $3,831 on Johnson & Johnsons One Touch Verio test strips.
12 36. Plaintiff Julia Boss is domiciled in Oregon. She is the mother and a caretaker for
13 her minor daughter, who was diagnosed with type 1 diabetes in March 2015. In both Oregon and
14 Washington, where she formerly resided, Boss purchased and enrolled in health benefit plans
15 through the Affordable Care Act (ACA) marketplace, as well as directly through an insurer,
16 for which Defendants CVS Health and Express Scripts administer pharmacy benefits. On
17 numerous occasions, pursuant to the terms of those plans, Boss paid a copay, coinsurance, and/or
18 the full price for test strips produced by one or more of Manufacturer DefendantsAbbott,
20 37. In 2015, while residing in Washington, Boss was enrolled in the Assurant Health
21 Washington CoreMed Bronze 1 Plan, for which CVS Health administered the pharmacy benefits.
22 Under this plan, Boss paid 100% of the list price for test strips until she met her $6,000
23 deductible/out-of-pocket maximum, after which the plan paid 100% of the cost of test strips.
24 Boss paid the full list price of Johnson & Johnsons One Touch Verio and Bayers Contour Next
25 test strips.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 13 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 22 of 274
1 38. On January 1, 2016, Boss enrolled in the Premera Blue Cross Preferred Silver
2 3000 HSA, for which Express Scripts administered the pharmacy benefits. During this time Boss
3 paid the full list price in cash for her daughters test strips until she met the $3,000 deductible,
4 after which she paid a 20% coinsurance for Roches Accu-Chek Aviva test strips until she met
5 the $4,100 out-of-pocket limit, after which the plan paid 100% of the cost of test strips.
6 39. During August 2016, Boss and her family moved to Eugene, Oregon, where she
7 enrolled in the Moda Health Oregon Standard Silver Plan using the ACA Marketplace. The plan
8 had an effective date of September 1, 2016, and included a prescription benefit administered by
9 MedImpact. Under this plan, Boss paid a $50 copay for Abbotts Freestyle Lite test strips, the
11 40. As of January 1, 2017, Boss is enrolled in the Providence Oregon Standard Silver
12 Plan, for which Argus Health Systems, Inc. administers the pharmacy benefits. Under the terms
13 of her current plan, her daughters diabetes supplies, including her test strips are covered in full.
14 Since her daughters diagnosis in March 2015, Boss has paid approximately $1,700 for test
17 corporation initially incorporated in Washington and currently organized and existing under the
18 laws of Oregon. T1DF is an organization operated exclusively for charitable purposes and to
19 promote the social welfare, further the common good, and protect the legal rights of all
20 individuals diagnosed with type 1 diabetes and individuals with other insulin-dependent diabetes.
21 In furtherance of its goals, the organization works through lobbying, litigation, and campaigns to
22 raise public awareness about issues that affect people with type 1 diabetes.
23 42. On information and belief, each individual Plaintiff paid out-of-pocket for test
24 strips and that payment was based on an artificially inflated list price. As a result, each individual
25 Plaintiff has been injured, and Plaintiffs have standing to protect their own rights and the rights
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 14 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 23 of 274
1 43. Together, Plaintiffs Prescott, Bewley, Strumello, and T1DF seek to represent the
2 ERISA Class as the ERISA Plaintiffs. Together, Plaintiffs Boss and T1DF seek to represent
4 Plaintiffs. T1DF seeks to represent the Uninsured Class as the Uninsured Plaintiffs. The
6 B. Defendants.
7 44. Defendant CVS Health Corporation is a corporation organized under the laws
8 of Delaware and headquartered at One CVS Drive, Woonsocket, Rhode Island, 02895. CVS
9 Health Corporation is a pharmacy benefit manager and, as such, contracts on behalf of health
10 plans and insurers with the Manufacturer Defendants for the test strips that these companies
11 make. CVS Health Corporation provides comprehensive prescription benefit management
12 services to over 2,000 health plans, including corporations, managed care organizations,
13 insurance companies, unions and government entities, and covers 65 million lives.33 CVS Health
14 Corporation reported $177.5 billion in revenue in 2016.34
15 45. Defendant Caremark Rx, L.L.C. is a Delaware limited liability company and an
16 immediate or indirect parent of many subsidiaries, including pharmacy benefit management
17 subsidiaries. Caremark Rx, L.L.C. is a subsidiary of Defendant CVS Health Corporation.
18 46. Defendant Caremark Rx, Inc. is a corporation organized under the laws of
19 Delaware and headquartered at 211 Commerce Street, Suite 800, Nashville, Tennessee, 37201.
20 Caremark Rx, Inc. is an immediate or indirect parent of many subsidiaries, including pharmacy
21 benefit management subsidiaries, and a subsidiary of Defendant CVS Health Corporation.
22 Collectively, Defendant CVS Health Corporation, Defendant Caremark Rx, L.L.C. and
23 Defendant Caremark Rx, Inc. are referred to as CVS Health.
24
25
33
Ed Kaplan & Wendy Pongracz, Negotiating and Drafting Pharmacy Benefit Manager Contracts for Self-Insured
26 Plans, STRAFFORD (June 21, 2016), http://media.straffordpub.com/products/negotiating-and-drafting-pharmacy-
benefit-manager-contracts-for-self-funded-plans-2016-06-21/presentation.pdf.
34
CVS Health Corp., supra note 27.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 15 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 24 of 274
3 48. Defendant Express Scripts, Inc. is a corporation organized under the laws of
4 Delaware and headquartered at 1 Express Way, St. Louis, Missouri, 63121. Express Scripts is a
5 pharmacy benefit manager and, as such, contracts on behalf of health plans and insurers with the
6 Manufacturer Defendants for purchase of the test strips that these companies make. As the
7 largest pharmacy benefit management organization in the United States, Defendant Express
8 Scripts Inc. covers 79 million lives35 and the company reported $96.5 billion in revenue in
9 2016.36 Defendant Express Scripts, Inc. is a subsidiary of Defendant Express Scripts Holding
10 Company. Defendant Express Scripts, Inc., and Defendant Express Scripts Holding Company
13 principal place of business at 9900 Bren Road East, Minnetonka, Minnesota, 55343.
15 reported revenue in excess of $157 billion, and the company is currently ranked sixth on the
16 Fortune 500 list. UnitedHealth offers a spectrum of products and services including health
17 insurance plans through its wholly owned subsidiaries and prescription products through its
18 PBM, OptumRx.
20 California and headquartered at 2300 Main St., Irvine, California, 92614. OptumRx is a
21 pharmacy benefit manager and, as such, contracts on behalf of health plans and insurers with the
22 Manufacturer Defendants for purchase of the test strips that these companies make. As one of the
23 largest pharmacy benefit management companies in the United States, OptumRx covers 65
24 million lives37 and reported approximately $48.2 billion in revenue in 2015; and over $60.44
25
35
26 Kaplan & Pongracz, supra note 33.
36
Express Scripts Holding Co., supra note 25.
37
Kaplan & Pongracz, supra note 33.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 16 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 25 of 274
1 billion in 2016.38 Collectively, Defendant OptumRx and Defendant UnitedHealth are referred to
2 as OptumRx.
3 51. Together, CVS Health, Express Scripts, and OptumRx are referred to as the
4 PBM Defendants.
5 52. Defendant Abbott Laboratories is an Illinois corporation with its principal place
6 of business at 100 Abbott Park Road, Abbott Park, Illinois, 60064. Abbott Laboratories market
7 value is greater than $60 billion. It manufactures and markets health care products such as the
8 FreeStyle brand of test strips, including Lite, InsuLinx, and Precision Neo varieties.
9 53. Defendant Abbott Diabetes Care, Inc. is a Delaware corporation, and its
10 principal place of business is at 100 Abbott Park Road, Abbott Park, Illinois, 60064. Abbott
11 Diabetes Care, Inc. is a wholly-owned subsidiary of Abbott Laboratories. It develops and sells
14 with its principal place of business at 100 Abbott Park Road, Abbott Park, Illinois, 60064.
16 Diabetes Care, Inc. It markets and sells blood glucose monitoring systems, including test strips,
17 in the United States. Collectively, Abbott Laboratories, Abbott Diabetes Care, Inc., and Abbott
19 55. Defendant Bayer Healthcare LLC is a Delaware corporation. Its principal place
20 of business is 100 Bayer Boulevard, Whippany, New Jersey, 07981. Bayer Healthcare LLC
21 produced test strips under the names Contour, Contour Next, and Breeze2 test strips, until Bayer
24 headquarters located at 5 Wood Hollow Road, Parsippany, New Jersey, 07054. Ascensia
25 produces Contour, Contour Next, and Breeze2 test strips. Ascensia Diabetes Care US Inc. was
26
38
UnitedHealth Group, supra note 26.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 17 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 26 of 274
1 established in 2016 through the acquisition of Bayer Diabetes Care by Panasonic Healthcare
2 Holdings.
3 57. Collectively, Bayer Healthcare LLC and Ascensia Diabetes Care US Inc. are
4 referred to as Bayer.
5 58. Defendant LifeScan, Inc. is a California corporation having its principal place of
8 59. Defendant Johnson & Johnson is a New Jersey corporation with its principal
9 place of business at One Johnson & Johnson Plaza, New Brunswick, New Jersey, 08933.
10 Johnson & Johnson is the parent corporation of LifeScan. Collectively, Johnson & Johnson and
12 60. Defendant Roche Diagnostics Corporation is an Indiana company that has its
13 headquarters at 9115 Hague Road, P.O. Box 50457, Indianapolis, Indiana, 46250-0457. Roche
14 produces a variety of Accu-Chek test strips, including the Guide, Aviva, Aviva Plus, Compact,
16 61. Collectively, Abbott, Bayer, Johnson & Johnson, and Roche are referred to as the
17 Manufacturer Defendants.
19 this includes the officers, agents, or employees of said defendants as well as predecessor and
22 63. Subject Matter Jurisdiction. Because claims alleged in this Complaint arise
23 under federal law, 28 U.S.C. 1331 provides subject-matter jurisdiction in this Court.
24 Jurisdiction also exists pursuant to 18 U.S.C. 1964(c) because Plaintiffs allege claims under the
25 Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962. Further, 29 U.S.C.
26 1132(e)(1) confers subject matter jurisdiction on this Court over claims brought under Title I of
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 18 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 27 of 274
1 ERISA. This Court also has supplemental jurisdiction over the state law claims in this action
2 pursuant to 28 U.S.C. 1367. This Court also has subject matter jurisdiction over this action
3 pursuant to 28 U.S.C. 1332(d)(2)(A), (5), because Plaintiffs and most members of the putative
4 Class are citizens of different states than the Defendants, the aggregate amount in controversy
5 exceeds five million dollars, exclusive of interest and costs, and the Class has more than 100
6 members.
7 64. Personal Jurisdiction. This Court has personal jurisdiction over Defendants
8 because Defendants are amenable to service of process, are co-conspirators, and each has
9 minimum contacts with this district and has purposefully availed itself of the privilege of
10 conducting business in the State of Washington, in particular with respect to Plaintiff Boss.
11 ERISA 502(e)(2) and 29 U.S.C. 1132(e)(2) provide for nationwide service of process. This
12 Court also has personal jurisdiction over all Defendants pursuant to Federal Rule of Civil
13 Procedure 4(k)(1)(A) because they would be subject to the jurisdiction of a court of general
14 jurisdiction in Washington.
15 65. Venue. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391(b)
16 and (c), because each Defendant transacts business in, is found in, and/or has agents in the
17 Western District of Washington, and because some of the actions giving rise to the complaint
18 took place within this district, including with respect to Plaintiff Boss. Venue is also proper in
19 this District pursuant to ERISA 502(e)(2), 29 U.S.C. 1132(e)(2), because Defendants may be
20 found in this District and some of the fiduciary breaches or other violations for which relief is
21 sought on behalf of the ERISA Class occurred in or originated in this District. Venue is also
22 proper in this District pursuant to 18 U.S.C. 1965, because most Defendants reside, are found,
23 have an agent, or transact their affairs in this District, and the ends of justice require that any
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 19 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 28 of 274
2 A. Millions of patients use blood glucose test strips to avoid serious and even life
threatening complications of diabetes.
3
66. Diabetes is a condition in which the body does not properly process food for use
4
as energy.39 In a person who does not have diabetes, the pancreas secretes the hormone insulin,
5
which controls the rate at which food is converted to glucose, or sugar, in the bloodstream so as
6
to be effectively used by the body as energy.40 People with diabetes are unable to make enough
7
insulin or cannot use insulin as effectively as necessary, causing glucose, or sugar, to build up in
8
the bloodstream. These consistently high levels of blood glucose, or blood sugar, pose a number
9
of serious health risks including heart disease, blindness, kidney failure, and lower-extremity
10
amputations.41 Though treatable, diabetes can be severely debilitating or fatal if left untreated.
11
Diabetes-related complications are the seventh leading cause of death in the United States.42
12
67. As of 2014, 29.1 million people in the United States, or 9.3 percent of the
13
population, had diabetes, and that number continues to grow.43 The most common types of
14
diabetes in the U.S. are type 1 and type 2, as well as gestational diabetes.44 Patients with type 1
15
diabetes are unable to produce insulin at all because their immune system attacks and destroys
16
the cells in the pancreas that make it.45 Although people with type 2 diabetes are able to produce
17
insulin, they are unable to use it effectively.46 About 95 percent of cases of diabetes in adults are
18
type 2.47
19
20
21
39
CDC, Diabetes, https://www.cdc.gov/media/presskits/aahd/diabetes.pdf (last visited Mar. 16, 2017).
22 40
See National Institute of Diabetes and Digestive and Kidney Diseases [hereinafter NIDDKD], Low Blood Glucose
(Hypoglycemia), NIDDKD, https://www.niddk.nih.gov/health-information/diabetes/overview/preventing-
23 problems/low-blood-glucose-hypoglycemia (last visited May 19, 2017).
41
CDC, supra note 39.
42
24 Id.
43
CDC, supra note 1.
44
25 What is Diabetes, National Institute of Health (Nov. 2016), https://www.niddk.nih.gov/health-
information/diabetes/overview/what-is-diabetes.
45
26 Id.
46
CDC, supra note 39.
47
Id.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 20 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 29 of 274
1 68. For diabetes patients who use insulin pumps or take multiple insulin injections per
2 day, self-monitoring of blood glucose (SMBG) is a core component of managing the disease.48
3 Patients who need to complete SMBG monitor their blood glucose several times per day, which
4 helps them manage their diet, decide how much insulin to take, and avoid episodes of
6 and treatment to prevent organ and brain damage.49 Hypoglycemia can happen at any time, day
7 or night, and most diabetes patients are affected at some point in their lives.50 Approximately
8 90% of all patients who receive insulin have experienced hypoglycemic episodes.51 The short
9 and long term complications [of hypoglycemia] include neurologic damage, trauma,
10 cardiovascular events and death.52 Recent estimates indicate that six, seven, or even ten percent
11 of people with type 1 diabetes die from hypoglycemia.53 Hypoglycemia is the leading cause of
12 sudden death in Type 1 patients and is the number one cause of ER visits.54 Thus, the failure to
13 monitor and control glucose levels, including via SMBG, can cause serious long-term
15 69. Patients can test their glucose level by placing a disposable test strip into an
16 electrochemical glucose meter, poking their fingertip with a lancet to get a drop of blood, and
17 holding the test strip against the drop of blood on their fingertip. Glucose meters are a type of
18 biosensor, which consists of enzymes that recognize target molecules, a transducer that converts
19
20
21 48
Yeaw, J., et al., Cost of self-monitoring of blood glucose in the United States among patients on an insulin
regimen for diabetes, J MANAG. CARE PHARM. (Jan.-Feb. 2012), https://www.ncbi.nlm.nih.gov/pubmed/22235952.
22 49
Shafiee, supra note 4.
50
Id. at 2.
23 51
Id.
52
Id. (footnote omitted).
53
24 Philip E. Cryer, Death During Intensive Glycemic Therapy of Diabetes: Mechanisms and Implications, 124 AM. J.
MED. 993, 993 (2011), http://www.amjmed.com/article/S0002-9343(11)00687-5/pdf.
54
25 Presentation, The Future of Diabetes Control, BIODEL (Aug. 13, 2013), 2013 Life Sciences Management Access
Conference, slide 34. These statistics translate into between 2,800 and 9,300 deaths and approximately 282,000
26 visits to the emergency room. Allergy v. Hypoglycemia: GlucaPenTM Potential in the US, EJECT, INC. (Jul. 2010),
http://www.healthline.com/hlcmsresource/images/diabetesmine/wp-
content/uploads/2010/07/Allergy_vs._Hypoglycemia_and_GlucaPen.pdf; CDC, supra note 1, at 5.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 21 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 30 of 274
1 that recognition of a molecule into a measurable signal, and a processor that converts the signal
3 70. The first electrochemical monitor for SMBG was launched in 1987.56 The current
4 operation of most commercial glucose monitors has not changed significantly from that of the
5 1987 monitor over the past 30 years.57 At this point, innovation has reduced and companies are
6 focusing less on development of the chemistry and more on the extraction of profit from the
7 investment already made,58 and it is working. In 2000, the world market for SMBG testing
8 supplies was $3.8 billion, and just eight years later, in 2008, the worldwide sale of these
9 products climbed to an astonishing $8.8 billion.59 The market continues to grow; in 2015, the
10 global glucose monitoring and diabetes management market was valued at over $10 billion.60
11 71. For many diabetes patients, glucose strips are not optionalthey must test their
12 blood sugar levels regularly and adjust their glucose levels by using insulin or making dietary
13 changes. Patients with insulin-dependent type 2 diabetes may be instructed to test their blood
14 sugar two or more times per day, while people with type 1 diabetes may need to test their blood
15 sugar four to eight times per day, if not more.61 If patients begin to develop hypoglycemia, they
16 must eat carbohydrates and test their blood sugar every ten to fifteen minutes until it has returned
17 to a normal range, which can significantly increase the number of blood glucose strips used.62 If
18 patients do not have insurance or have already exceeded their allotted number of strips and
19
20 55
Eun-Hyung Yoo & Soo-Youn Lee, Glucose Biosensors: An Overview of Use in Clinical Practice, SENSORS 2010,
10, 455960.
21 56
Id. at 4562.
57
Id.
22 58
Anthony P.F. Turner, Biosensors: sense and sensibility, 42 CHEM. SOC. REV. 3184, 3188 (2013),
http://pubs.rsc.org/en/content/articlehtml/2013/cs/c3cs35528d.
23 59
Mark D. Hughes, The Business of Self-Monitoring of Blood Glucose: A Market Profile, 3 J. OF DIABETES SCI. AND
TECH. 1219, 1219 (2009).
60
24 Kalorama Information, Report: Glucose Monitoring Market tops $10 Billion, PR NEWSWIRE (Sep. 30, 2015,
11:12), http://www.prnewswire.com/news-releases/report-glucose-monitoring-market-tops-10-billion-
25 300151264.html.
61
See Blood sugar testing: Why, when and how, MAYO CLINIC, http://www.mayoclinic.org/diseases-
26 conditions/diabetes/in-depth/blood-sugar/art-20046628 (last visited May 23, 2017).
62
See Hypoglycemia: Treatment and drugs, MAYO CLINIC, http://www.mayoclinic.org/diseases-
conditions/hypoglycemia/basics/treatment/con-20021103 (last visited May 22, 2017).
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 22 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 31 of 274
1 cannot afford to buy more at the list price set by defendants, they risk death from severe
2 hypoglycemia.63 Today, it is estimated that around 17 billion test strips are used each year.64
11
12
13
14
15
16
17
18
19
20
21
22
23
63
See Shafiee, supra note 4, at 1.
64
24 Blood Glucose Monitoring, UNIVERSAL BIOSENSORS, INC., http://www.universalbiosensors.com/Products/Verio-
Product-Information.aspx (last visited May 22, 2017).
25 65 CDC, supra note 1, at 1.
66
American Diabetes Association, Economic Costs of Diabetes in the U.S. in 2012, 36 DIABETES CARE 1033, 1033
26 67 (2013), http://care.diabetesjournals.org/content/36/4/1033.full-text.pdf.
The Staggering Costs of Diabetes In America, AMERICAN DIABETES ASSOC.,
http://main.diabetes.org/dorg/images/infographics/adv-cost-of-diabetes.gif (last visited Mar. 9, 2017).
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 23 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 32 of 274
1 73. Thus, millions of test strip purchasers whose healthor the health of their loved
2 onesdepends on the products are captive to the market manipulation and other harmful aspects
3 of Defendants Test Strip Pricing Scheme, which has unlawfully hiked the price of test strips in
4 the relevant product market for glucose test stripswhich is, geographically, the United States
1 the PBM or reducing the PBMs or plans share owed by that amount. Many PBMs also own
2 mail-order and specialty pharmacies, which directly supply medical products to patients,
5 relationships with medical product manufacturers. PBMs negotiate rebates, fees, and other
6 concessions with the manufacturers. These relationships allow PBMs to exert tremendous
7 influence and control over what products are made available to health plans and insureds.
8 79. The following chart illustrates the prescription supply chain, and the PBMs
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26 70
Joseph Walker, Drugmakers Point Finger at Middlemen for Rising Drug Prices, WALL ST. J. (Oct. 3, 2016, 12:43
PM), https://www.wsj.com/articles/drugmakers-point-finger-at-middlemen-for-rising-drug-prices-1475443336.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 25 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 34 of 274
2 80. Defendants schemes to make increasing profits off of test strip sales have
3 devastating effects on the lives of real people. Unlike the PBMs, insurers, pharmacies, and health
4 plans, patients are directly subjected by the PBM Defendants to the list price artificially set by
5 the Manufacturer Defendants. The manner and extent of this impact depends on how patients get
7 81. Uninsured. First, uninsured consumers who need to test their blood sugar
8 because they are completely outside of the PBMs and manufacturers web of PBM Kickback
9 financing arrangements through health plansmust pay the full list price. This is not a small
10 population. Although the coverage rates have increased significantly lately, by the end of 2015
11 there were still 28.5 million nonelderly Americans who lacked insurance.71 In 2012, there were 2
12 million adults between the ages of 18-64 with diabetes without health insurance coverage, which
14 82. Deductibles. Second, consumers who are in health plans suffer directly from
15 inflated test strip prices when they pay their deductibles. The deductible is the amount that an
16 insured must pay before insurance benefits will contribute to medical and pharmacy expenses.
17 Thus, until the deductible is met, an insured must pay out-of-pocket. Depending on the plan,
18 consumers may be required to pay the full list price of drugs and other medical needs.
19 83. Moreover, deductibles are rising, meaning that insured consumers are having to
20 pay more out-of-pocket for medical needs, including test strips. The Kaiser Family Foundation
21 found that in 2016, deductibles rose 12% in the market group and four times faster than
22
23
24
71
25 Key Facts about the Uninsured Population, THE KAISER FAMILY FOUNDATION (Sept. 29, 2016),
http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/.
26 72 Sarah Casagrande & Catherine Cowie, Health Insurance Coverage Among People With and Without Diabetes in
the U.S. Adult Population, 35(11) DIABETES CARE 2243-2249 (Nov. 2012),
http://care.diabetesjournals.org/content/35/11/2243.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 26 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 35 of 274
1 premiums increased.73 The higher the deductible, the more consumers have to pay full price for
3 84. Almost a quarter of all people obtaining insurance through employers are now
5 deductible amount has increased 67% since 2010. And almost half of workers are covered by
6 insurance with annual deductibles of at least $1,000 for individual coverage.74 With the surge in
9
10
11
12
13
14
15
16
17
18
19
1 year after year. As a result, rising list prices for drugs and other prescription products are
2 particularly harmful to patients in high-deductible plans, not only because they hit their
3 deductibles annually, but because they hit their deductibles over a shorter period of time,
4 resulting in significant financial burden at the start of each calendar year. Individuals or families
5 who do not have excess cash or access to credit to meet this annual burden may resort to testing
6 their blood sugar less frequently to spread their out-of-pocket payments over a longer period of
7 time.
8 86. Cost sharing. Third, even after deductibles are paid, insured consumers
9 prescription costs still are affected by the PBMs and manufacturers pricing scheme through
10 copayments and coinsurance requirements. Some plans require these payments during the
11 deductible phase, while others require payment of the full list price with copayments and
13 87. Copayments are set amounts that an insured must pay for medical services,
14 including prescriptions. Copayments vary by the prescribed product, with products in preferred
15 formulary positions carrying a lower copay and products in a disfavored position costing the
16 insured more. If the brand of test strips that corresponds to an insured patients glucose meter is
17 moved to a less preferred tier on her PBMs formulary, for example, the patient then must spend
18 more because of that less favorable formulary placement, which is driven by Defendants Test
21 product that the insured must pay. In the case of prescription products, the coinsurance amount is
22 based on the inflated list price, not an adjusted price based on the secret rebates and kickbacks
23 that PBMs negotiate, and not the amount that manufacturers actually collect and that PBMs or
25 89. To add insult to injury, the portion of prescription costs that an insured persons
26 plan will pay is often not based on the full, inflated list priceit is based on a negotiated lower
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 28 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 37 of 274
1 price, which will take into account some rebates, discounts, or other concessions passed through
2 to the plan by the PBM. Thus, plans with such arrangements do not simply pay the difference
3 between the participants payment and the list pricethey instead pay something lessand for
4 large insurers or those that own PBMs, something much less. The burden on participants and
5 beneficiaries of such plans is disproportionate to whatever percentages they may think they are
6 shouldering.
7 90. Additional strips. Fourth, although some diabetes patients need to use eight or
8 more test strips per day, many health plans limit coverage to only three or four strips per day. 76 If
9 a diabetes patient buys additional strips on medical advice, she pays the full inflated list price.
1 1990s.79 When a PBM combines with a pharmacy, they lose the incentive to police against
2 pharmaceutical company schemes to steer patients to more expensive drugs. Indeed, they may
3 collude in them.80 The power of the largest PBMs has continued to grow, and has allowed them
5 94. For example, the PBM Defendants operate mail-order pharmacies, and Defendant
6 CVS Health also owns retail pharmacies. When consumers purchase test strips from these
7 pharmacies, they are dealing with the PBM entities that are conspiring to drive up the prices of
8 test strips through their formulary placement leverage and rebate demands from the
9 manufacturers, who then raise their prices to benefit themselves and the PBM Defendants.
10 95. PBMs make outsize profits by exploiting the complex prescription distribution
11 system in the United States. While the role of PBMs in the supply chain is well known, the size
12 of the rebates and other fees they extract from companies for formulary placement, and the
13 portion of these payments they pocket (the PBM Kickbacks) are carefully guarded secrets.81
14 96. Manufacturers well understand the power of PBMs.82 Because of their size, and
15 the many thousands of health plan clients they represent, PBMs can steer business from one
16 manufacturer to another based on which one pays the larger PBM Kickback. These relationships
17 also result in higher prices to those who are uninsured or otherwise have no direct relationship
18 with the PBMs other than buying from the pharmacies the PBMs own.
19 97. PBMs depend on the lack of transparency to conduct their business and have
20 vigorously resisted any requirement that they disclose the details of their agreements with
21
22
23
79
See id.
80
24 Id.
81
See, e.g., Lydia Ramsey, One of the largest middlemen in the drug industry just released a video showing why it
25 should be able to remain secretive, BUSINESS INSIDER (Feb. 9, 2017, 5:22 PM),
http://www.businessinsider.com/what-pharmacy-benefit-managers-are-doing-about-trump-and-drug-pricing-2017-
26 82 2.
Denise Roland & Peter Loftus, Insulin Prices Soar While Drugmakers Share Stays Flat, WALL ST. J. (Oct. 7,
2016, 5:46 PM), https://www.wsj.com/articles/insulin-prices-soar-while-drugmakers-share-stays-flat-1475876764.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 30 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 39 of 274
1 manufacturers, and the PBM Kickbacks they receive from manufacturersas well as their
3 98. Although consumers are led to believe that the list price is the actual price for a
4 prescribed product, including test strips, the list price is inflated to account for PBM Kickbacks,
5 which are rebated back to the PBMs, as shown in the following diagram. Note that the diagram
6 is only illustrative and that insurers do not necessarily receive a large proportion of the rebates
7 back from PBMs, which may keep all or most of the PBM Kickbacks in some instances.
8 Overall, nearly one-third of the total expenditures on branded pharmaceuticals were, in some
11
12
13
14
15
16
17
18
19
20
21
22
23
24
83
Id.
84
25 Wayne Winegarden, The Economic Costs of Pharmacy Benefit Managers: A Review of the Literature, Pacific
Research Institute (May 2017) at 5.
26 85 Lydia Ramsey and Skye Gould, A huge pharma middleman just lost its biggest customer and it shows how
drug pricing really works, BUSINESS INSIDER (Apr. 25, 2017, 6:57 AM), http://www.businessinsider.com/express-
scripts-esrx-anthem-not-renewing-pbm-2017-4.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 31 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 40 of 274
2 99. Even though PBMs tell their clients that they reduce prescription prices, the
3 rebates that PBMs negotiate actually comprise a significant portion of the gross sales of
4 manufacturers. The following figure depicts the percentage of gross drug sales that is accounted
5 for by both rebates and selling, general, and administrative (SG&A) spending.
6 Figure 6: SG&A and Rebates as a Percentage of U.S. Gross Drug Sales Per
Company in 201686
7
9
10
11
12
13
14
15
16
17
18 100. Rebates continue to rise. In 2016, rebates climbed to 37.3% from 35.7% in
19 2015.87
20 101. According to the Pharmaceutical Care Management Association, the trade group
21 that represents the PBM industry, PBMs manage pharmacy benefits for over 266 million
22 Americans.88 Three large companies dominate the PBM market: Express Scripts, CVS Health,
23 and OptumRx. Together, these companies cover roughly 78% of insured Americans.89
24
86
Global Pharma and Biotech Sector Review, CREDIT SUISSE (Apr. 18, 2017).
87
25 Id. at 5.
88
Our Mission, PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION, https://www.pcmanet.org/our-industry/ (last
26 89 visited Feb. 26, 2017).
Patricia M. Danzon, PhD, 2014 ERISA Advisory Council PBM Compensation and Fee Disclosure (2014),
https://www.dol.gov/sites/default/files/ebsa/about-ebsa/about-us/erisa-advisory-council/ACDanzon061914.pdf.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 32 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 41 of 274
1 102. Express Scripts is the largest PBM in the United States.90 In 2016, annual revenue
2 for Express Scripts was approximately $102.287 billion.91 As of December 31, 2016, more than
3 69,000 retail pharmacies, representing over 98% of all retail pharmacies in the nation,
5 103. CVS Health Corporation, including its subsidiary CVS Caremark filled or
6 managed approximately 1.2 billion prescriptions during the year ended December 31, 2016,
7 equaling approximately 1.6 billion prescriptions when counting 90-day prescriptions as three
8 separate prescriptions.93
9 104. In 2015, CVS Health Corporations pharmacy services segment, which includes
10 the corporations PBM activities but not its retail/long-term care segment, brought in $100.363
11 billion in net revenues.94 CVS Health, through its subsidiary PBM, provides pharmacy benefit
12 administration for a network of more than 68,000 retail pharmacies, including approximately
14 105. The third largest PBM, OptumRx, owned by UnitedHealth, provides pharmacy
15 care services to more than 65 million people in the nation through a network of more than 67,000
16 retail pharmacies and multiple delivery facilities. 96 In 2016, OptumRx managed more than $80
18 106. Business for the PBM Defendants is booming. For example, from 2014 to 2015,
19 Express Scripts net income increased by $468.8 million, or 23.4 percent.99 In 2016, gross profit
20 for CVS Healths pharmacy services segment, which includes the PBM CVS Caremark,
21
22 90
Anne Steele, Express Scripts Revenue Falls, WALL ST. J. (Feb. 14, 2017, 4:49 PM),
https://www.wsj.com/articles/express-scripts-revenue-falls-1487108990.
23 91
Express Scripts Holding Co., supra note 25.
92
Id.
93
24 CVS Health Corp., supra note 27.
94
CVS Health, 2015 ANNUAL REPORT (2016).
95
25 Id.
96
UnitedHealth Group, supra note 26.
97
26 Id.
98
Id.
99
Express Scripts Holding Co., supra note 25.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 33 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 42 of 274
1 increased 12.9 percent.100 And OptumRxs earnings from operations increased 53 percent from
2 2015 to 2016.101
3 107. The PBM Defendants earnings increased further in 2016. Express Scripts net
4 income increased 37.5 percent from 2015 to 2016.102 CVS Healths gross profits from its
5 pharmacy services segment increased by an additional 9.6 percent.103 And OptumRx reported a
3 111. However, the arrangement is not operated ethically and honestly. The
4 Manufacturer Defendants and PBM Defendants are gaming the system. They have realized that
5 they both benefit if, instead of the PBM Defendants forcing the Manufacturer Defendants to sell
6 test strips to them and their clients for less money, they induce the Manufacturer Defendants to
7 raise their publicly reported list price, but largely maintain the net prices. This creates what is, in
8 effect, a massive slush fund derived from the difference between the net and list prices that can
9 be used by the Manufacturer Defendants to pay the larger and larger rebates demanded by the
11 112. Although Defendants keep the details of the Test Strip Pricing Scheme a secret, in
12 a pending lawsuit, Abbott admitted that the list price for test strips is inflated to account for
13 rebates. Abbott filed a lawsuit against test strip wholesalers and pharmacies, alleging that they
14 wrongfully imported, distributed, and sold Abbotts FreeStyle glucose test strips that were
15 labeled for sale in other countries, not in the United States.107 Acknowledging that the
16 international FreeStyle strips were functionally the same as the strips sold in the United States,
17 Abbott explained why strips labeled for sale in this country nevertheless are much more
18 expensive.108 Due to the differences between U.S. and international insurance, reimbursement,
19 and rebate practices, Abbott sells FreeStyle test strips outside the United States at markedly
20 lower list prices.109 Indeed, the rebates account for essentially all of the difference between
21 the price for Abbotts test strips in other countries and in the United States, as Abbott admits in
23
24
106
Roland & Loftus, supra note 80.
107
25 Amended Complaint, Abbott Laboratories v. Adelphia Supply USA, No. 15-cv-05826 (E.D.N.Y. Mar. 28, 2016),
ECF No. 307.
26 108
109
Id. 11.
Id. 7.
110
Id. 381.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 35 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 44 of 274
1 In many foreign countries, the list price for FreeStyle test strips is lower than the
United States. This is because the insurance systems in those countries differ from
2 that in the United states. In particular, they involve little or no reimbursements or
rebates. After all reimbursements and rebates are considered, the net price for
3
U.S. and foreign FreeStyle test strips is similar throughout the developed world.
4
113. Roche similarly revealed in a complaint that it filed that its test strip list prices are
5
artificially inflated to accommodate rebates. The test strip manufacturer sued a number of
6
pharmacies and test strip distributors, claiming that the defendants had lied to fraudulently obtain
7
rebates from Roche.111 Allegedly, the defendants conspired to buy test strips from Roche that
8
were intended for resale only to persons covered by insurance plans that provide benefits for test
9
strips as durable medical equipment (DME), rather than plans that cover test strips as a
10
pharmacy benefit. 112
11
114. Unlike when test strips are covered as a pharmacy benefit, Roche explained that
12
test strips that are designated for sale only to DME beneficiaries (including Medicare
13
beneficiaries) involve no rebates.113 Retail strips, on the other hand, which are designated for
14
sale to anyone, including patients who have insurance that covers test strips as a pharmacy
15
benefit, carry inflated list prices to account for rebates.114 Therefore, even though the list price
16
for DME strips is much lower, the net price that Roche receives is comparable for both groups
17
of test strips.115
18
115. In its complaint, Roche alleges that the defendants ordered test strips labeled for
19
beneficiaries of insurance plans that cover test strips as DME, but instead ultimately sold them to
20
beneficiaries of health plans that categorize test strips as a pharmacy benefit. 116 This resulted,
21
according to Roche, in Roche paying rebates for test strips that were not artificially inflated to
22
23
111
24 Amended Complaint, Roche Diagnostics Corp. v. Binsons Hosp. Supplies, Inc., No. 17-cv-00949-LJM-DML,
(S.D. Ind. Apr. 5, 2017), ECF No. 12.
25 112 Id. 2.
113
Id. 40.
26 114
115
See id. 38, 39.
Id. 4.
116
Id. 2.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 36 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 45 of 274
1 account for rebates.117 Roche in effect acknowledged that the high list price of test strips for
2 pharmacy plan beneficiaries (and the uninsured) has nothing to do with the products themselves.
3 116. Roche provided an example: Roche sells DME strips to mail-order distributors
4 for under $20 per vial of 50 strips.118 In contrast, Roche sells the same vial of 50 strips to
5 wholesalers for approximately $71.119 The cause of the stark difference between these prices is
6 the Test Strip Pricing SchemeRoche artificially raises the price for its test strips to offer PBMs
7 a greater spread.
8 117. Roche incorrectly alleged, however, that consumers are not hurt by this pricing
9 scheme because most are covered by insurance. Although Roche claims that over 90% of
10 purchasers of its retail strips have insurance that covers the test strips as a pharmacy benefit,
11 that means that 10% of purchasers pay the full price out-of-pocketwithout receiving any of the
12 rebates that drive the inflated list price.120 Moreover, as described above, even diabetes patients
13 who have insurance coverage for test strips as a pharmacy benefit must nevertheless pay a
14 portion of the inflated list pricein the form of out-of-pocket payments before their annual
15 deductible has been satisfied, copayments that are inflated based on the inflated list price, and
16 coinsurance rates.
17 118. Like with other prescription products, the PBM Defendants business model
18 includes taking a portion of these rebates for themselves after they negotiate them.
19 119. The scheme allows the Manufacturer Defendants to maintain or increase their
20 profit margins on test strips sold in the United States and ensure their access to the millions of
21 Americans whose drugs and other medical products are made available via the PBM formularies.
22 And the scheme allows the PBM Defendants to leverage their control over formularies to obtain
23 PBM Kickbacks. With net prices staying the same, and list prices going up, the rebates get
24 bigger, and so does the PBM Defendants cut. The scheme artificially drives up list prices
25
117
Id. 4.
118
26 Id. 40.
119
See id. 39.
120
See id. 38.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 37 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 46 of 274
1 specifically so that the PBM Defendants can earn more profit from the rebates that the
2 Manufacturer Defendants pay to the PBM Defendants behind the scenes. And the Manufacturer
3 Defendants can pay the PBM Defendants what they demand while increasing the Manufacturer
5 120. As alleged in another complaint filed by a producer of generic test strips, Johnson
6 & Johnson has taken advantage of the test strip market to prevent generic manufacturers from
7 competingessentially forcing consumers who used the OneTouch Ultra glucose meters to
8 continue paying inflated prices for Johnson & Johnsons brand strips. UniStrip Technologies,
9 LLC received FDA approval to market and sell a cost-effective alternative test strip that would
10 work with Johnson & Johnsons four most popular meters.121 Johnson & Johnson held virtually
11 100% of the market for FDA-approved test strips that were compatible with the OneTouch Ultra
12 family of glucose monitors.122 UniStrip alleged that to thwart competition, Johnson & Johnson
14 boycott or refuse to sell UniStrips lower-priced test strips for fear of incurring price increases
15 and penalties on an array of products.123 Johnson & Johnson also sued UniStrip for patent
18 maintaining inflated list prices, and far from using their prodigious bargaining power to lower
19 test strip prices, the PBM Defendants abuse their position in order to benefit both themselves and
20 the Manufacturer Defendants. It is a profitable enterprise, though deeply unethical and damaging
21 to consumers, who shoulder the burden of the higher list prices through increased out-of-pocket
22 payments. This dynamic lies at the heart of the rising cost of test strips, and the resulting public
23 health disaster.
24
121
Second Amended Complaint, UniStrip Tech., LLC, v. LifeScan, Inc., No. 14-CV-04518-JHS, 2015 WL 5521803
25 7 (E.D. Pa. Mar. 30, 2015).
122
Id. 6.
26 123
124
Id. 2.
See Stipulation of Dismissal, LifeScan, Inc., v. UniStrip Tech., LLC, No. 14-CV-00247-RJC-DSC (W.D.N.C.
Mar. 28, 2017), ECF No. 43.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 38 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 47 of 274
1 126. Similarly, in the lawsuit that Roche filed, the manufacturer acknowledged that
2 even though the list price for test strips designated for sale to patients who have coverage for test
3 strips as DME is much lower than the list price for other diabetes patients, Roche receives
4 comparable net revenues for test strips with either designation.130 Again, this is because PBMs
5 profit from the list price for test strips that are artificially inflated to the benefit of the PBM
6 Defendants. Meanwhile, the Manufacturer Defendants profit off of the same inflated list price
7 borne by uninsured patients, as well as by keeping their sales up through participation in the Test
9 127. Despite the inflated price of their test strips, the Manufacturer Defendants
10 dominate the market for self-monitoring of blood glucose. A 2009 report concluded that the
12 3. List prices for the Manufacturer Defendants test strips continue to rise.
13 128. Not only are the Manufacturer Defendants test strips much more expensive than
14 alternatives, but they continue to increase in price. In the last ten years, for example, the average
15 wholesale price of some of the test strips from each Manufacturer Defendant has steadily risen:
16
17
18
19
20
21
22
23
24
25
26 130
Amended Complaint, Roche Diagnostics Corp. v. Binsons Hosp. Supplies, Inc., ECF No. 12 4.
131
Hughes, supra note 59, at 1221.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 40 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 49 of 274
9
10
11
12
H. PBMs collude with the Manufacturer Defendants to inflate test strip prices.
13
129. In a normal market, companies offering comparable products would compete by
14
offering consumers lower prices to win business. But the market for glucose test strips is far
15
from normal. Test strips are considered a prescription benefit, like insulin and other drugs. Thus,
16
whether and to what extent health plan enrollees will have coverage for a manufacturers test
17
strips depends on how the PBM Defendants structure their formularies.
18
130. Moreover, if a health plan enrollee wants the out-of-pocket expense of test strips
19
to contribute to paying down her annual deductible, then she has no choice but to pay the inflated
20
price for the brand that is on her PBMs formularyotherwise the purchase doesnt count.
21
131. As explained above in regard to the PBM Defendants grip on the pharmacy
22
benefit market, they wield extraordinary control over the access that manufacturers of pharmacy
23
products have to insured diabetes patients. Just last year, for example, two of the PBM
24
Defendants, CVS Health and Express Scripts, made headlines for removing dozens of
25
26
132
Compiled from Medi-Span historical and current average wholesale price data.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 41 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 50 of 274
1 medications from their standard formularies.133 Both PBMs removed a number of test strip
2 brands from their formularies, preferring Johnson & Johnsons OneTouch instead.134 CVS Health
3 went so far as to remove All other test strips that are not ONETOUCH brand.135
5 sales volume, the Manufacturer Defendants artificially inflate the list price for their test strips
6 allowing the PBM Defendants to cash in on the spread between the list and net prices without
7 decreasing the Manufacturer Defendants own profits. This is how the Manufacturer Defendants
8 remain on top of an industry where, despite the presence of multiple competitors, they continue
10 133. The Manufacturer Defendants also have revealed that published list prices are
12 wholesale prices for test strips have been climbing, net prices for diabetes products have not. For
13 example, although the wholesale price for OneTouch Ultra test strips rose by 40.5 percent
14 between 2007 and 2016,136 Johnson & Johnson stated in 2017 that [t]he diabetes market is very
15 price sensitive, and [net] prices have been declining for some time . . . .137 A Johnson & Johnson
16 executive acknowledged the role that rebates play in increasing prescription prices during an
17 earnings call. The companys Executive Vice President and Chief Financial Officer explained
18 that rebates continue to be an increasing part of the business and the overall realization of gross
19 price to net price, that delta is expanding, I would say, over time.138
20
21
133
Alison Kodjak, Will Your Prescription Meds Be Covered Next Year? Better Check!, NATIONAL PUBLIC RADIO
22 (Aug. 15, 2016, 4:32 AM), http://www.npr.org/sections/health-shots/2016/08/15/489790412/will-your-
prescription-meds-be-covered-next-year-better-check.
23 134
CVS Caremark Formulary Drug Removals, April 2017,
http://www.caremark.com/portal/asset/Formulary_Exclusion_Drug_List.pdf (last visited May 22, 2017).
135
24 Id.
136
From Medi-Span average wholesale price data.
137
25 Linda A. Johnson, Johnson & Johnson 1Q profit dips amid drug cost pressure, ARKANSAS DEMOCRAT-GAZETTE
(Apr. 19, 2017, 2:17 AM), http://www.arkansasonline.com/news/2017/apr/19/johnson-amp-johnson-1q-profit-
26 dips-amid/?f=business (alteration in article).
138
Johnson & Johnson Q2 2016 Earnings Call, July 19, 2016, recording available at:
https://earningscast.com/JNJ/20160719.
K E L L E R R O H R B AC K L . L . P .
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 42 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 51 of 274
1 134. Roche similarly reported a decline in Diabetes Care business, which faced
2 continued pricing pressure [,]139 despite the steady increase in average wholesale price for its
3 Accu-Chek Compact Plus test strips. Indeed, a diabetes market commentator noted broadly that
4 prices for test strips continue to contract.140 That is because the increases in list prices are, in
6 135. This is consistent with Abbotts admissions in its own lawsuit. After all
7 reimbursements and rebates are considered, the net price for U.S. and foreign FreeStyle test
9 136. Thus, the PBMs presence in and influence on the U.S. market for test strips is
10 driving the price gouging that hurts U.S. consumers. The Manufacturer Defendants are critical
11 players that make this scheme work for both themselves and the PBM Defendants.
1 [The rebates] dont necessarily help offset the costs paid by those who need a
particular drug. . . . [I]f a patient needs a particular drug, they will increasingly
2 find that they are paying the full, negotiated price at the pharmacy counter. They
never see the real net price, after the rebate is applied much later.142
3
4 139. Among constraints on the SMBG market, a report noted the [g]eneral
5 unwillingness of diabetes patients (many of whom are low income or on fixed incomes) to pay
6 more out-of-pocket expense. With copays generally rising, some patients are seeking lower-
7 cost alternatives or testing less frequently.143
8 140. Because of the high cost of test strips, a gray market for test strips exists
9 businesses pay diabetes patients for unused test strips, which the businesses then sell to other
10 diabetes patients for less than the store price. The reliability of strips purchased through the gray
11 market, however, is questionable. Glucose strips contain enzymes and must be stored within
12 certain temperatures. It is doubtful that test strip resellers are cautious about preserving the
13 efficacy of the strips that they purchase.144 Thus, diabetes patients who seek lower prices through
14 the gray market unfortunately risk purchasing strips that will not measure their glucose levels
15 accurately.
16 141. The artificially inflated list prices for test strips has endangered the health of
17 diabetes patients. To reduce the expense of test strips, some diabetes patients do not test their
18 glucose levels as frequently as they shouldor at allrisking their health or even their lives.145
19 V. ERISA ALLEGATIONS
20
A. The PBM Defendants are fiduciaries and parties in interest.
21 142. The ERISA Plaintiffs and the members of the ERISA Class (as defined below) are
22 participants in employee welfare benefit plans, as that term is defined in 29 U.S.C. 1002(1)(A),
23 whose pharmacy benefits covering prescription medications are administered by the PBM
24 Defendants (ERISA Plans).
25
142
Winegarden, supra note 83, at 6.
143
26 Hughes, supra note 59, at 1220.
144
NATIONAL PUBLIC RADIO, supra note 12.
145
Avril, supra note 29.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 44 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 53 of 274
1 143. ERISA requires every plan to provide for one or more named fiduciaries who will
2 have authority to control and manage the operation and administration of the plan. ERISA
4 144. ERISA treats as fiduciaries not only persons explicitly named as fiduciaries under
5 402(a)(1), 29 U.S.C. 1102(a)(1), but also any other persons who in fact perform fiduciary
6 functions. Thus, a person is a fiduciary to the extent (i) he exercises any discretionary authority
7 or discretionary control respecting management of such plan or exercises any authority or control
8 respecting management or disposition of its assets, (ii) he renders investment advice for a fee or
9 other compensation, direct or indirect, with respect to any moneys or other property of such plan,
10 or has any authority or responsibility to do so, or (iii) he has any discretionary authority or
12 1002(21)(A). This is a functional test. Neither named fiduciary status nor formal delegation
13 is required for a finding of fiduciary status, and contractual agreements cannot override finding
15 145. The PBM Defendants are fiduciaries of all of the ERISA Class members ERISA
16 Plans for which they administered prescription benefits in that they exercised discretionary
17 authority or control respecting the following plan management activities, ERISA 3(21)(A)(i),
19 responsibility in the administration of the ERISA Plans of participants and beneficiaries in the
21 they did and/or could do one or more of the following with respect to the ERISA Plans:
22 a. negotiate with the Manufacturer Defendants for the inclusion of the prescription
23 products that they manufacture on the PBM Defendants formularies that govern
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 45 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 54 of 274
1 b. negotiate with the Manufacturer Defendants the prices that patients and the ERISA
2 Plans will pay, including through placement of specific test strips on tiered
3 formularies;
4 c. dictate whether a particular brand of test strip was covered, and if so, in which tier it
5 was categorized;
7 e. negotiate with the Manufacturer Defendants the amount of rebates, discounts, fees, or
8 other financial incentive payments (i.e., PBM Kickbacks, as defined above) that the
9 PBM Defendants will receive from the Manufacturer Defendants upon the purchase
11 f. induce the Manufacturer Defendants to artificially inflate the list prices so that there
12 is room enough in the test strip pricing regime for the PBM Kickbacks, while the
13 Manufacturer Defendants net profits and sales volumes are buoyed by their test
15 g. dictate the portion, if any, of the PBM Kickbacks that are shared with or passed
16 through to other entities, such as health insurers, plan administrators, plan sponsors,
17 or patients;
20 j. manage the prescription benefit program, including processing and paying test strip
22 k. choose whether to fill a prescription from a participant for test strips, reject the
23 prescription, or shift the participant to a different brand of test strip or require the use
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 46 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 55 of 274
1 l. determine the amount of and require the collection of additional profits and
2 compensation for services provided by the PBM Defendants pursuant to the ERISA
3 Plans;
5 the amount of PBM Kickbacks they will collect from the Manufacturer Defendants
6 and the amount of such PBM Kickbacks they will ultimately keep for themselves in
10 o. set and change the compensation of themselves with respect to the ERISA Plans by
12 p. misrepresent, conceal, and/or fail to disclose to patients and fiduciaries other than the
13 PBM Defendants the manner in which the PBM Defendants charged for prescription
15 q. misrepresent, conceal, and/or fail to disclose to patients and to fiduciaries other than
16 the PBM Defendants the amounts and components of PBM Kickbacks that the PBM
18 r. misrepresent, conceal, and/or fail to disclose to patients and to fiduciaries other than
19 the PBM Defendants the PBM Defendants compensation and profit collected in
21 s. improperly trade off the interests of ERISA Plan participants and beneficiaries for the
23 the expense of participants and others paying amounts that are captured by the PBM
25 t. improperly trade off the interests of plan participants and beneficiaries for the benefit
26 of third parties, including the Manufacturer Defendants, who are able to sell more of
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 47 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 56 of 274
1 the test strips they produce as a result of their participation in the pricing scheme
2 described herein;
3 u. improperly trade off the interests of plan participants and beneficiaries for the benefit
4 of third parties, including the Manufacturer Defendants, who are able to sell the test
5 strips they produce at a higher price as a result of their participation in the pricing
7 v. leverage their contractual relationships with ERISA Plans, their insurers and plan
8 administrators, and the pharmacies from which the ERISA Plans and their
10 billions of dollars that flow from test strips purchases by ERISA Plans and their
11 participants and beneficiaries, as well as leverage the ERISA Plan instruments that
12 govern these transactions, as described further below, causing Plan participants to pay
14 146. The PBM Kickbacks are possible because of the PBMs discretion and power to
15 do the foregoing, which makes them fiduciaries to the ERISA Plans. The PBM Defendants
16 relationships with and access to the ERISA Plans and related test strip purchases are the source
17 of this discretion and power. They have and use discretion and authority to set their own fees and
18 compensation by virtue of their role with respect to the administration and/or management of the
19 ERISA Plansa central part of which is and was negotiating test strip prices from which the
20 PBM Defendants extract a significant cut of rebates and other payments from the Manufacturer
21 Defendants while increasing, rather than decreasing, costs to ERISA Plan participants. Thus the
22 PBM Defendants fiduciary power is, in part, the power over their own fees and compensation,
23 because their fees and compensation flow from the test strip price negotiations only they have the
24 power to conduct on behalf of the ERISA Plans. The fees and compensation the PBM
25 Defendants extract from these negotiations performed on behalf of the ERISA Plans or by
26 improperly leveraging their relationships with the ERISA Plans are achieved at the substantial
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 48 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 57 of 274
1 expense of the ERISA Plans participants and beneficiaries, who must pay purchase prices that
2 result from the inflated list prices that are central to and caused by Defendants Test Strip Pricing
3 Scheme.
4 147. Further, the PBM Kickbacks were additional compensation for the administration
5 of test strip coverage that was collected by the PBM Defendants that was neither disclosed to nor
6 agreed to by the participants and beneficiaries or others that were required to make these
7 additional payments so that participants and beneficiaries could receive their covered
8 prescription products. The PBM Defendants had and exercised discretion to determine the
9 amount of and require the payment of this additional undisclosed compensation, as well as
10 whether to disclose itor require its concealment. ERISA 3(21)(A)(i), (iii), 29 U.S.C.
11 1002(21)(A)(i), (iii).
12 148. The PBM Kickbacks are additional premium within the meaning of ERISA
13 702, for the provision of test strip coverage that was collected by the PBM Defendants that was
14 neither disclosed to nor agreed to by the participants and beneficiaries that were required to make
15 these additional contributions to receive their covered test strips. The PBM Defendants had and
16 exercised discretion to determine the amount of and require the payment of this additional
17 undisclosed premium payment, as well as whether to disclose itor require its concealment.
20 provisions, the PBM Defendants are fiduciaries of all of the ERISA Class members ERISA
21 Plans in that they exercised authority or control respecting management or disposition of plan
24 required pharmacies to collect from participants and beneficiaries are plan assets
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 49 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 58 of 274
2 contracts) underpinning the plans are plan assets within the meaning of ERISA; and
3 c. Through the pricing scheme, as described above, the PBM Defendants exercised
4 control over both (i) test strip payments from participants and beneficiaries and (ii)
6 150. Specifically, the PBM Defendants successfully and improperly leveraged their
7 relationships with and authority over the ERISA Class members ERISA Plans and plan assets to
8 benefit themselves and third parties, and without their authority or control over significant plan
9 assets and relationships with the ERISA Plans they would not have been able to do so. Through
10 the Test Strip Pricing Scheme, the PBM Defendants caused participants to pay inflated prices for
11 test strips.
12 151. Further, any plan-paid amounts that were contributed to participant test strip
13 transactions were plan assets within the meaning of ERISA. Incident to their pricing scheme,
14 the PBM Defendants also exercised control over these plan assets, part of which became PBM
15 Kickbacks, making the PBM Defendants fiduciaries for purposes of these transactions.
16 152. Thus, the PBM Defendants are able to pervert their ostensible role as the entity
17 that will drive test strip prices downand they instead induce the Manufacturer Defendants to
18 raise prices on test strips to allow for PBM Kickbacksbecause they have and exercise control
19 over both ERISA Plans and ERISA plan assets. The PBM Defendants access to the ERISA
20 Plans and their ERISA plan assets is used as leverage in the PBM Defendants negotiations with
21 the Manufacturer Defendants. But for the PBM Defendants access to millions of insureds test
22 strip transactions and the funds used to purchase test strips for plan participants, and their central
23 role in managing plan assetsi.e., the insurance policies and ASO contracts underpinning
24 Plaintiffs ERISA Plans under which prescription benefits are providedthe PBM Defendants
25 would not be able to negotiate and extract the PBM Kickbacks. Thus, the PBM Defendants
26 leveraged their unique and powerful access to one of the most exploitable (and lucrative) plan
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 50 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 59 of 274
1 assets that exists todayhealth insurance policies and ASO contractsas well as their key
2 relationships with and access to thousands of ERISA Plans. The direct result of the PBMs power
3 and abuse of that power is that participants and beneficiaries of the ERISA Plans must pay more
5 153. In addition to the conduct described herein, the PBM Defendants are fiduciaries
6 because they exercise discretion to set the prices that the members of the ERISA Class were and
7 are required to pay for test strips. PBMs are required to act in the best interests of the members of
8 the ERISA Class, but by allowing participants and beneficiaries of ERISA Plans to be subject to
9 the pricing scheme described herein and participating in this scheme with the Manufacturer
10 Defendants, the PBM Defendants have also breached their fiduciary duties to the ERISA Class,
12 154. The PBM Defendants are aware of the effect the pricing scheme is having on the
13 ERISA Class. Nevertheless, they have maximized and continue to maximize their revenues and
14 the revenues of the Manufacturer Defendants at the expense of the ERISA Class by engaging in
16 155. In summary, to the extent the PBM Defendants have negotiated agreements
17 subject to or collected funds in connection with the Test Strip Pricing Scheme described herein,
18 they have exercised both discretionary and non-discretionary authority and control over the
19 ERISA Plans, their management and administration, and ERISA plan assets by setting their own
20 margins and compensation for managing the sale of prescription medications, through rebate and
21 other payment negotiations with the Manufacturer Defendants. As discussed further below, this
22 same conduct breached their fiduciary duties under ERISA and constituted prohibited
23 transactions. For example, in negotiating and entering into a contract on behalf of an ERISA
24 plan, a fiduciary must act prudently and negotiate terms that are reasonable and in the best
25 interests of plan participants and beneficiaries. In these negotiations and in the contract,
26 agreement, or arrangement that is ultimately agreed upon, a fiduciary cannot place its interests
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 51 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 60 of 274
1 over the interests of the plan participants and beneficiaries, including with respect to the
3 156. In addition to being fiduciaries for the foregoing reasons, the PBM Defendants are
4 also parties in interest under ERISA because (a) they are fiduciaries, ERISA 3(14)(A),
5 29 U.S.C. 1002(14)(A); and/or (b) they provided plan administration and pharmacy benefit
6 management services to the ERISA Plaintiffs and the ERISA Class members health plans,
9 interestalso received and used for their own and third parties benefit plan assets, including
10 patients and certain ERISA Plans contributions to test strip purchases and ERISA Plan
11 contracts under which and through the management of which they had access to the ERISA
12 Plans and ERISA plan assets, and were able to impose their pricing scheme on the ERISA Class.
13 158. Notably, the foregoing powers and activities confer fiduciary status on the PBM
14 Defendants for all types of ERISA Plans for which they provide pharmacy benefit services
15 including both insured plans and self-insured or union funded (Taft-Hartley) plans for which a
17 because these plans all utilize PBMs in the same manner. Thus, all participants and beneficiaries
18 in ERISA Plans of whatever type are owed fiduciary duties by the PBM Defendants, and these
19 participants and beneficiaries may bring claims for their own personal losses caused by the PBM
21 159. As a result of the PBM Defendants misuse of their fiduciary power, ERISA Plan
22 participants and beneficiaries are forced to finance the PBM Kickbacks, from which the PBM
23 Defendants and others profit. The PBM Kickbacks do not just enrich the PBM Defendants, they
24 do so to the detriment of Plan participants, who pay inflated prices for test strips as a result of the
25 scheme.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 52 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 61 of 274
2 160. The Statutory Requirements: ERISA imposes strict fiduciary duties upon plan
4 [A] fiduciary shall discharge his duties with respect to a plan solely in the interest
of the participants and beneficiaries and . . . for the exclusive purpose of
5 providing benefit to participants and their beneficiaries; and defraying reasonable
6 expenses of administering the plan; with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man acting in a like
7 capacity and familiar with such matters would use in the conduct of an enterprise
of like character and with like aims; by diversifying the investments of the plan so
8 as to minimize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so; and in accordance with the documents and instruments
9 governing the plan insofar as such documents and instruments are consistent with
10 the provisions of this title and Title IV.
11 161. The duty of loyalty. ERISA imposes on a plan fiduciary the duty of loyaltythat
12 is, the duty to discharge his duties with respect to a plan solely in the interest of the participants
13 and beneficiaries and . . . for the exclusive purpose of . . . providing benefits to participants and
14 their beneficiaries . . . . The duty of loyalty entails a duty to avoid conflicts of interest and to
15 resolve them promptly when they occur. A fiduciary must always administer a plan with an eye
16 single to the interests of the participants and beneficiaries, regardless of the interests of the
17 fiduciaries themselves or the plan sponsor.
18 162. The duty of prudence. Section 404(a)(1)(B) also imposes on a plan fiduciary the
19 duty of prudencethat is, the duty to discharge his duties with respect to a plan solely in the
20 interest of the participants and beneficiaries and . . . with the care, skill, prudence, and diligence
21 under the circumstances then prevailing that a prudent man, acting in a like capacity and familiar
22 with such matters would use in the conduct of an enterprise of a like character and with like
23 aims. . . .
24 163. The duty to inform. The duties of loyalty and prudence include the duty to
25 disclose and inform. These duties entail: (a) a negative duty not to misinform; (b) an affirmative
26 duty to inform when the fiduciary knows or should know that silence might be harmful; and (c) a
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 53 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 62 of 274
1 duty to convey complete and accurate information material to the circumstances of participants
2 and beneficiaries.
4 from certain acts because they are self-interested or conflicted and therefore become per se
5 violations of ERISA 406(b)or because they are improper party in interest transactions
6 under ERISA 406(a). As noted above, under ERISA, a party in interest includes a fiduciary
7 as well as entities providing any services to a plan, among others. See ERISA 3(14), 29
8 U.S.C. 1002(14). ERISAs prohibited transaction rules are closely related to ERISAs duties of
10 165. ERISA 406(a) provides that transactions between a plan and a party in interest
11 are prohibited transactions unless they are exempted under ERISA 408:
14 (1) A fiduciary with respect to a plan shall not cause the plan to engage in a transaction, if
16 (A) sale or exchange, or leasing, of any property between the plan and a party in interest;
17 (B) lending of money or other extension of credit between the plan and a party in interest;
18 (C) furnishing of goods, services, or facilities between the plan and a party in interest;
19 (D) transfer to, or use by or for the benefit of a party in interest, of any assets of the plan;
20 or
21 (E) acquisition, on behalf of the plan, of any employer security or employer real property
23 29 U.S.C. 1106(a).
26 (1) deal with the assets of the plan in his own interest or for his own account,
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 54 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 63 of 274
1 (2) in his individual or in any other capacity act in any transaction involving the plan on
2 behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or
4 (3) receive any consideration for his own personal account from any party dealing with
5 such plan in connection with a transaction involving the assets of the plan.
6 29 U.S.C. 1106(b).
7 167. Co-fiduciary liability. A fiduciary is liable not only for fiduciary breaches within
8 the sphere of its own responsibility, but also as a co-fiduciary in certain circumstances. ERISA
10 In addition to any liability which he may have under any other provision of this
part, a fiduciary with respect to a plan shall be liable for a breach of fiduciary
11 responsibility of another fiduciary with respect to the same plan in the following
12 circumstances:
20 fulfill all or part of its duties, by formal or informal hiring, subcontracting, or delegation,
21 assumes the duty to monitor that appointee to protect the interests of the ERISA participants and
22 beneficiaries. As noted above, the power to appoint, retain, and remove plan fiduciaries or
23 service providers confers fiduciary status upon the person holding such power.
24 169. The duty not to discriminate. A health insurer may not discriminate against
25 insureds by charging excessive premiums. ERISA 702, 29 U.S.C. 1182, states in pertinent
26 part:
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 55 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 64 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 56 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 65 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 57 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 66 of 274
2 172. The PBM Defendants committed breaches of fiduciary duty and prohibited
3 transactions, and harmed the ERISA Plaintiffs and ERISA Class members in the following ways:
4 a. The ERISA Plaintiffs and ERISA Class members were charged excessive
6 Strip Pricing Scheme, which caused the list price of test strips to be artificially
7 inflated;
8 b. Through the Test Strip Pricing Scheme, the ERISA Plaintiffs and ERISA Class
9 members were charged unlawful fees and additional premiums for test strips;
10 c. The ERISA Plaintiffs and ERISA Class members were overcharged for copayment
12 price for test strips or a flat fee based on an uninflated price for test strips, these cost-
14 d. The ERISA Plaintiffs and ERISA Class members were overcharged when making
16 paying an uninflated price for test strips, they were charged inflated amounts as a
18 e. The PBM Defendants improperly leveraged their relationships with and access to the
19 ERISA Plans and their plan assets to extract the PBM Kickbacks from the
20 Manufacturer Defendants;
21 f. The PBM Defendants discriminated against patients who have diabetes as compared
24 participants and beneficiaries the manner in which they charged for test strips as
25 alleged above;
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 58 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 67 of 274
1 h. The PBM Defendants set their own compensation for services performed as
2 fiduciaries by inducing the Manufacturer Defendants to inflate test strip list prices to
4 i. The PBM Defendants unilaterally collected their own compensation for services
6 j. The PBM Defendants set and changed the compensation of third parties with respect
7 to the ERISA Class members ERISA Plans by allocating the proceeds of the PBM
9 k. The PBM Defendants maximized their own profits and profits to third parties, at the
11 l. The PBM Defendants received improper compensation from entities doing business
12 with the ERISA Plans whose pharmacy benefits the PBM Defendants administered
13 and managed;
14 m. The PBM Defendants knew or reasonably should have known that their actions would
15 injure plan participants and beneficiaries of all ERISA Plans whose test strip prices
16 they manipulated;
17 n. The PBM Defendants negotiated test strip prices and PBM Kickbacks based on
18 disloyal and self-interested factors and made such decisions without putting the
20 o. The PBM Defendants drove up test strip prices instead of driving them down, in order
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 59 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 68 of 274
1 173. The ERISA Plaintiffs and ERISA Class members were overcharged for and/or
4 174. The ERISA Plaintiffs and ERISA Class members were harmed by an abuse of the
5 fiduciary power that the PBM Defendants possessa substantial part of which gives the PBM
6 Defendants discretion and authority over the administration and management of the ERISA plans
7 with respect to prescription benefits and costs and their own fees and compensation, as well as
8 nondiscretionary power over the management and disposition of plan assets. The PBM
9 Defendants ability to wield their fiduciary power to extract from the Manufacturer Defendants
10 kickbacks and other benefits for themselves directly and financially harmed participants and
11 beneficiaries of the ERISA Plans. The ERISA Plaintiffs and ERISA Class members were forced
12 to pay purchase prices for test strips that were based on the very same inflated list prices that
13 facilitated the PBM Defendants profits from rebates and other payments that the Manufacturer
14 Defendants paid in exchange for formulary placement and access to the test strip purchases of
15 ERISA Plan participants and beneficiaries whose ERISA Plans the PBM Defendants managed
16 and administered. Had the PBM Defendants required the Manufacturer Defendants to compete
17 on price, participants cost sharing amounts would have been based on lower list prices. Thus,
18 the PBM Defendants profits derived from the Test Strip Pricing Scheme directly harm
21 175. By its nature, Defendants Test Strip Pricing Scheme has hidden Defendants
22 unlawful conduct from consumers and injured parties. Plaintiffs and Class members did not
23 know about the Test Strip Pricing Scheme, nor could they have reasonably discovered its
25 176. Through the exercise of reasonable diligence, Plaintiffs and members of the
26 proposed Classes could not have discovered within the time period of applicable statutes of
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 60 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 69 of 274
1 limitation that Defendants were engaged in the conduct described in this Complaint and were
2 misrepresenting the actual cost of test strips, the net price collected by the Manufacturer
3 Defendants, and the amount of PBM Kickbacks that resulted from the scheme. Indeed, these are
4 figures that Plaintiffs still do not know due to Defendants secretive scheme.
5 177. Nor did Plaintiffs and other Class members know of facts that would have caused
6 a reasonable person to suspect that Defendants were engaged in the Test Strip Pricing Scheme. A
7 reasonable and diligent investigation would not have disclosed these facts.
8 178. Even today, lack of transparency in test strip pricing and the arrangements,
9 relationships, and agreements between and among the Manufacturer Defendants and the PBM
10 Defendants that result in the PBM Kickbacks continue to hide Defendants unlawful conduct
12 179. Thus, the discovery rule has tolled the statutes of limitation with respect to claims
14 180. Defendants deceptive and fraudulent practices and the denial of the misconduct
15 alleged in this action also have tolled all relevant statutes of limitation. For example, ERISAs
16 statute of limitation for fiduciary breach claims, ERISA 413, 29 U.S.C. 1113, provides that
17 in the case of fraud or concealment, [an] action may be commenced not later than six years after
18 the date of discovery of such breach or violation. And while the RICO statute does not contain
19 an express limitation period, the United States Supreme Court has held that civil RICO claims
20 must be brought within four years from the discovery of an injury, which limitation is subject to
21 equitable tolling due to defendants fraudulent concealment of their unlawful conduct. Rotella v.
23 181. The Test Strip Pricing Schemeby its nature a secret endeavor by Defendants
24 remains hidden from most members of the Classes. The precise amount of PBM Kickbacks
25 remains information in Defendants possession and largely a mystery to the Classes. Moreover,
26 during the Class Period, as defined below, each Defendant actively and effectively concealed its
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 61 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 70 of 274
1 participation in the Test Strip Pricing Scheme from Plaintiffs and other members of the Classes
2 through opaque practices and secrecy policies. There is no question that Plaintiffs claims are
3 timely.
4 182. Defendants are estopped from relying on any statutes of limitations. Despite their
5 ongoing obligation to reveal to Plaintiffs and Class members the real price that they should have
6 been charged for test strips, the Defendants instead disclosed only the artificially inflated list
7 price that resulted from the Test Strip Pricing Scheme. The net price paid by the PBM
8 Defendants for test strips, the existence of the Test Strip Pricing Scheme, and the impact that it
9 had on Plaintiffs and Class members payment obligations for test strips all were hidden in an
10 attempt to continue to profit at the expense of Plaintiffs and Class members. This deception
11 cannot be rewarded by allowing the Defendants to hide behind the defense of statutes of
12 limitation.
14 183. Plaintiffs repeat and re-allege every allegation above as if set forth in full herein.
15 184. Pursuant to Federal Rule of Civil Procedure 23(a), (b)(3), (b)(2), and (b)(1),
16 Plaintiffs bring this suit on their own behalf and on behalf of three proposed classes of other
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 62 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 71 of 274
1 The Uninsured Class. All individuals residing in the United States and its
territories who are or were not enrolled in a health benefit plan or health insurance
2 plan, who purchased the Manufacturer Defendants test strips and who paid any
portion of the purchase price.
3
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 63 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 72 of 274
1 190. Numerosity. Upon information and belief, each Class consists of millions of
2 purchasers residing throughout the United States. Accordingly, it would be impracticable to join
4 191. Typicality. Plaintiffs claims are typical of the members of the Classes, in that
5 they share facts and legal claims or questions with Class Members, there is a sufficient
6 relationship between the damage to Plaintiffs and Defendants conduct affecting Class Members,
7 and Plaintiffs do not have interests that are adverse to those of other Class Members.
8 192. Adequacy. Plaintiffs will fairly and adequately protect the interests of Class
9 Members and have retained competent counsel that have experience prosecuting complex class
10 actions, including complex questions that arise in consumer protection litigation. Counsel have
11 specific experience litigating pharmaceutical class actions and cases involving Pharmacy Benefit
12 Managers.
13 193. Commonality. Numerous and substantial questions of law and fact are common
14 to all members of the Classesall of whom were affected by the Test Strip Pricing Scheme.
18 ii. What the real or net prices for the Manufacturer Defendants test
19 strips are;
21 iv. Whether members of the Classes must pay a portion (or all) of the
24 increased the list price for test strips was to gain better placement on the PBM
25 Defendants formularies;
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 64 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 73 of 274
1 vi. Whether the PBM Defendants profit from the discrepancy between
2 the net prices and the inflated list prices for the Manufacturer Defendants test
3 strips;
12 Class members;
17 xv. Whether Defendants used the U.S. mails and interstate wire
18 facilities to carry out a scheme intended to defraud Plaintiffs and the Classes;
19 xvi. Whether Defendants used the U.S. mails and interstate wire
21 xvii. Whether Defendants are liable to Plaintiffs and the Class members
22 for damages;
24 xix. Whether the PBM Defendants are parties in interest under ERISA;
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 65 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 74 of 274
9 xxv. Whether Defendants violated the common law standards that exist
19 194. A class action is superior to other methods for the fair and efficient adjudication
20 of this controversy, since individual joinder of all Class Members is impracticable and no other
21 group method of adjudication of all claims asserted in this Complaint is more efficient and
24 questions of law or fact, if any exists at all, affecting any individual member of
25 the Classes;
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 66 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 75 of 274
5 Class Members could afford to or would seek legal redress individually for the
6 wrongs Defendants committed against them, and absent Class Members have no
8 actions;
13 management by the Court as a class action, which is the best available means by
14 which Plaintiff and members of the Classes can seek redress for the harm caused
15 to them by Defendant.
16 195. This action is also maintainable as a class action under Federal Rule of Civil
17 Procedure 23(b)(2) because Defendants have acted, or refused to act, on grounds generally
18 applicable to the Classes, thereby making appropriate final injunctive relief respecting the
19 Classes as a whole.
20 196. With respect to Federal Rule of Civil Procedure 23(b)(1)(B), the prosecution of
21 separate actions by each plaintiff in the Classes would create a risk of adjudications with respect
22 to individual members of each Class which would, as a practical matter, be dispositive of the
23 interests of the other members not parties to the actions, or substantially impair or impede their
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 67 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 76 of 274
1 197. Finally, Class action status is also warranted under Federal Rule of Civil
2 Procedure 23(b)(1)(A) because prosecution of separate actions by the members of the Classes
9 198. Plaintiffs incorporate by reference each preceding paragraph as though fully set
10 forth herein.
11 199. Plaintiffs bring this Count on behalf of themselves and the Classes against
12 Defendants CVS Health, Roche, Johnson & Johnson, Bayer, and Abbott (inclusively, for
14 200. At all relevant times, the CVS Health RICO Defendants have been persons
15 under 18 U.S.C. 1961(3) because they are capable of holding, and do hold, a legal or
17 201. Section 1962(c) makes it unlawful for any person employed by or associated
18 with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce,
19 to conduct or participate, directly or indirectly, in the conduct of such enterprises affairs through
21 202. Section 1962(d) makes it unlawful for any person to conspire to violate Section
23 203. As explained in detail below, Defendant CVS Health sought to infiltrate the
24 business arrangement established between four manufacturers of test stripsRoche, Johnson &
25 Johnson, Bayer, and Abbotthealth plans, and insurance companies across the country through
26 a fraudulent scheme designed to secure greater profits and market share, increase the cost of test
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 68 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 77 of 274
1 strips, secure a favorable formulary position for Roche, Johnson & Johnson, Bayer, and Abbotts
2 test strips, and extract millions of dollars of revenue from Plaintiffs and the Classes. As
3 explained in detail below, the CVS Health RICO Defendants years-long misconduct violated
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 69 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 78 of 274
1 Manufacturer Defendants, participate in a scheme with CVS Health, and other PBMs, to increase
2 the list price of their test strips instead of competing on cost with other test strip manufacturers.
3 209. This scheme to increase the profits of PBMs through artificially increasing the list
4 price of test strips benefits everyone in the industrys supply chain except Plaintiffs and the
5 Classes, who are left paying fraudulently obtained, exorbitant, and ever-increasing prices for
7 210. At all relevant times, each of the Manufacturer Defendants and CVS Health
9 1961(4), through which the members of that enterprise conducted a pattern of racketeering
11 211. Alternatively, each of the CVS Health RICO Defendants constitutes a single legal
12 entity enterprise within the meaning of 18 U.S.C. 1961(4), through which the CVS Health
13 RICO Defendants conducted a pattern of racketeering activity. The CVS Health RICO
14 Defendants separate legal statuses facilitated the fraudulent scheme and provided a hoped-for
15 shield from liability for the CVS Health RICO Defendants and their co-conspirators. The
16 enterprises, alleged in this and the previous paragraph, are referred to collectively as the CVS
18 212. At all relevant times, the CVS Health RICO Enterprise constituted a single
19 enterprise or multiple enterprises within the meaning of 18 U.S.C. 1961(4), as legal entities,
20 as well as individuals and legal entities associated-in-fact for the common purpose of engaging in
22 213. For all of the above alternatives, the association-in-fact CVS Health RICO
23 Enterprise consisted of the following entities and individuals: (a) CVS Health, its subsidiaries,
24 executives, employees, and agents; (b) Roche, its subsidiaries, executives, employees, and
25 agents; (c) Johnson & Johnson, its subsidiaries, executives, employees, and agents; (d) Bayer, its
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 70 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 79 of 274
1 subsidiaries, executives, employees, and agents; and (e) Abbott, its subsidiaries, executives,
3 214. While each of the CVS Health RICO Defendants acquired, maintained control of,
4 were associated with, and conducted or participated in the conduct of the CVS Health RICO
5 Enterprises affairs, at all relevant times, the CVS Health RICO Enterprise: (a) had an existence
6 separate and distinct from each CVS Health RICO Defendant; (b) was separate and distinct from
7 the pattern of racketeering in which the CVS Health RICO Defendants engaged; and (c) was an
8 ongoing and continuing organization consisting of legal entities, including the CVS Health RICO
9 Defendants, along with other individuals and entities, including unknown third parties.
10 215. The CVS Health RICO Defendants and their co-conspirators, through their illegal
11 CVS Health RICO Enterprise, engaged in a pattern of racketeering activity, which involved a
12 fraudulent scheme to increase revenue for the CVS Health RICO Defendants and the other
13 entities and individuals associated-in-fact with the CVS Health RICO Enterprises activities by
14 selling test strips at an inflated and artificial price (the CVS Health RICO Scheme).
15 216. CVS Health orchestrated the CVS Health RICO Scheme, whereby CVS Health,
16 as a PBM, leveraged its dominant position in the insurance market to demand that test strip
17 manufacturers, like Roche, Johnson & Johnson, Bayer, and Abbott, pay substantial kickbacks in
18 order to have their products included or be given priority on CVS Healths formularies.
19 217. The Manufacturer Defendants facilitated the CVS Health RICO Scheme by
21 maintain access to its formularies and funding those discounts by artificially increasing the list
23 218. In furtherance of the scheme, the CVS Health RICO Defendants each
24 affirmatively misrepresented or concealed the existence of the inflated and fraudulent nature of
25 these list price increases as well as the existence, amount, and purpose of the discounts given to
26 CVS Health to Plaintiffs, the Classes, consumers, health care payers, and the general public.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 71 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 80 of 274
1 Specifically, the CVS Health RICO Defendants claimed that the rebates paid to CVS Health
2 were for the purpose of lowering costs when, in fact, they were quid pro quo payments for
3 formulary access that had the opposite effect for Plaintiffs and the members of the Classes.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 72 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 81 of 274
1 associated-in-fact with the Enterprises activities through the illegal scheme to sell test strips at
3 223. The CVS Health RICO Enterprise engaged in, and its activities affected, interstate
4 and foreign commerce because it involved commercial activities across state boundaries, such as
5 the marketing, promotion, advertisement, distribution, and sale of test strips throughout the
6 country, and the receipt of monies from the sale of the same.
7 224. Within the CVS Health RICO Enterprise, there was a common communication
8 network by which co-conspirators shared information on a regular basis. The CVS Health RICO
9 Enterprise used this common communication network for purposes of marketing, pricing, and
10 engaging in negotiations regarding test strips, their pricing, and placement or position on CVS
11 Healths formularies and for furthering the CVS Health RICO Scheme.
12 225. Each participant in the CVS Health RICO Enterprise had systematic linkages to
13 each other through corporate ties, contractual relationships, financial ties, and a continuing
14 coordination of activities. Through the CVS Health RICO Enterprise, the CVS Health RICO
15 Defendants functioned as a continuing unit with the purpose of furthering the CVS Health RICO
16 Scheme.
17 226. The CVS Health RICO Defendants participated in the operation and management
18 of the CVS Health RICO Enterprise by directing its affairs, as described herein. While the CVS
19 Health RICO Defendants participated in, and are members of, the enterprise, they have a
20 separate existence from the enterprise, including distinct legal statuses, different offices and
23 227. The CVS Health RICO Defendants exerted substantial control over the CVS
24 Health RICO Enterprise, and participated in the affairs of the enterprise by: (a) negotiating
25 and/or offering discounts for test strips; (b) misrepresenting and/or concealing the existence,
26 amount, or purpose of the discounts negotiated for test strips; (c) misrepresenting and/or
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 73 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 82 of 274
1 concealing the effect that the negotiated discounts had on the price of test strips for the end
2 payer; (d) negotiating and/or setting the list price for test strips; (e) misrepresenting and/or
3 concealing the true cost of test strips; (f) publishing, reproducing, and/or distributing documents
4 containing the list price for test strips; (g) negotiating and/or offering preferred formulary
5 placement for test strips; (h) misrepresenting and/or concealing the true nature of the relationship
6 and agreements between the members of the enterprise and its effect on the pricing of test strips;
7 (i) otherwise misrepresenting and/or concealing the inflated and fraudulent nature of the pricing
8 of test strips; (j) collecting discounts, revenues, and/or profits from the sale of test strips; and (k)
9 ensuring that the other CVS Health RICO Defendants and unnamed co-conspirators complied
11 228. Without each CVS Health RICO Defendants willing participation, the CVS
12 Health RICO Scheme and common course of conduct would not have been successful.
13 229. The CVS Health RICO Defendants directed and controlled the ongoing
15 which Plaintiffs cannot fully know at present, because such information lies in the Defendants
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 74 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 83 of 274
1 232. The multiple acts of racketeering activity which the CVS Health RICO
2 Defendants committed, or aided or abetted in the commission of, were related to each other,
4 racketeering activity. The racketeering activity was made possible by the CVS Health RICO
5 Defendants regular use of the facilities, services, distribution channels, and employees of the
6 CVS Health RICO Enterprise. The CVS Health RICO Defendants participated in the scheme to
7 defraud by using mail, telephone, and the Internet to transmit mailings and wires in interstate or
8 foreign commerce.
9 233. The CVS Health RICO Defendants used, directed the use of, and/or caused to be
10 used, thousands of interstate mail and wire communications in service of their scheme through
12 234. In devising and executing the illegal scheme, the CVS Health RICO Defendants
13 devised and knowingly carried out a material scheme and/or artifice to defraud Plaintiffs and the
14 Classes or to obtain money from Plaintiffs and the Classes by means of materially false or
15 fraudulent pretenses, representations, promises, or omissions of material facts. For the purpose of
16 executing the illegal scheme, the CVS Health RICO Defendants committed these racketeering
17 acts, which number in the thousands, intentionally and knowingly with the specific intent to
19 235. The CVS Health RICO Defendants predicate acts of racketeering (18 U.S.C.
21 (a) Mail Fraud: The CVS Health RICO Defendants violated 18 U.S.C. 1341
by sending or receiving, or by causing to be sent and/or received, materials via
22 U.S. mail or commercial interstate carriers for the purpose of executing the
23 unlawful scheme to design, manufacture, market, price, and/or sell test strips by
means of false pretenses, misrepresentations, promises, and omissions.
24
(b) Wire Fraud: The CVS Health RICO Defendants violated 18 U.S.C. 1343
25 by transmitting and/or receiving, or by causing to be transmitted and/or received,
materials by wire for the purpose of executing the unlawful scheme to defraud
26 and obtain money on false pretenses, misrepresentations, promises, and
omissions.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 75 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 84 of 274
1 236. The CVS Health RICO Defendants use of the mails and wires include, but are
2 not limited to: (a) the transmission of marketing or other materials indicating, setting, or
3 negotiating the price of test strips; (b) the transmission of marketing or other materials indicating
4 or advertising that any of the CVS Health RICO Defendants reduce the price of test strips; (c)
5 written, telephone, or electronic communications regarding and/or negotiating the price of test
7 discounts and/or rebates for test strips; (e) written, telephone, or electronic communications
8 regarding the existence, amount, or purpose of discounts and/or rebates for test strips; (f) the
9 transmission and/or distribution of test strips through the mails; and (g) the use of the mails or
10 wires to bill for or collect discounts, revenues, and/or profits from the sale of such test strips.
11 237. The CVS Health RICO Defendants also communicated by U.S. mail, by interstate
12 facsimile, and by interstate electronic mail with various other affiliates, regional offices,
14 238. The mail and wire transmissions described herein were made in furtherance of
15 Defendants scheme and common course of conduct designed to increase the cost of test strips
16 and fraudulently extract hundreds of millions of dollars of revenue from Plaintiffs and the
17 Classes.
18 239. Many of the precise dates of the fraudulent uses of the U.S. mail and interstate
19 wire facilities have been deliberately hidden, and cannot be alleged without access to
20 Defendants books and records. However, Plaintiffs have described the types of predicate acts of
21 mail and/or wire fraud. They include thousands of communications to perpetuate and maintain
23 240. The CVS Health RICO Defendants have not undertaken the practices described
24 herein in isolation, but as part of a common scheme and conspiracy. In violation of 18 U.S.C.
25 1962(d), the CVS Health RICO Defendants conspired to violate 18 U.S.C. 1962(c), as
26 described herein. Various other persons, firms, and corporations, including third-party entities
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 76 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 85 of 274
1 and individuals not named as defendants in this Complaint, have participated as co-conspirators
2 with the CVS Health RICO Defendants in these offenses and have performed acts in furtherance
3 of the conspiracy to increase or maintain revenues, increase market share, and/or minimize losses
4 for the Defendants and their unnamed co-conspirators throughout the illegal scheme and
6 241. The CVS Health RICO Defendants aided and abetted others in the violations of
8 242. To achieve their common goals, the CVS Health RICO Defendants hid from
9 Plaintiffs, the Classes, insurers, health plans, and the general public the true net price of test
10 strips, the inflated and fraudulent nature of the list price of test strips, the relationship between
11 the CVS Health RICO Defendants and their impact upon the price of test strips, and the
12 existence, amount, and purpose of rebates and discounts given for test strips, and the portion of
14 243. The CVS Health RICO Defendants and each member of the conspiracy, with
15 knowledge and intent, agreed to the overall objectives of the conspiracy and participated in the
16 common course of conduct. Indeed, for the conspiracy to succeed, each of the CVS Health RICO
17 Defendants and their co-conspirators had to agree to conceal their fraudulent negotiations and
18 pricing tactics.
19 244. The CVS Health RICO Defendants knew, and intended that, Plaintiffs and Class
20 members would rely on the material misrepresentations and omissions made by them and incur
21 increased costs as a result. Indeed, if Plaintiffs and the Classes did not make inflated payments
22 for test strips, the CVS Health RICO scheme could not succeed.
23 245. As described herein, the CVS Health RICO Defendants engaged in a pattern of
24 related and continuous predicate acts for years. The predicate acts constituted a variety of
25 unlawful activities, each conducted with the common purpose of obtaining significant monies
26 and revenues from Plaintiffs and the Classes based on their misrepresentations and omissions,
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 77 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 86 of 274
1 while providing test strips that were worth significantly less than the purchase price paid. The
2 predicate acts also had the same or similar results, participants, victims, and methods of
3 commission. The predicate acts were related and not isolated events.
4 246. During the CVS Health RICO Defendants determination of discounts and/or
5 rebates for test strips, the true purpose of the discounts, the true cost of test strips, and the
6 inflated and fraudulent nature of their pricing was revealed to each of the CVS Health RICO
8 misrepresentations regarding the true cost of test strips as well as the existence, amount, and
10 247. By reason of, and as a result of the conduct of the CVS Health RICO Defendants,
11 and in particular, their pattern of racketeering activity, Plaintiffs and the Classes have been
12 injured in their business and/or property in multiple ways, including but not limited to paying
14 248. The CVS Health RICO Defendants violations of 18 U.S.C. 1962(c) and (d)
15 have directly and proximately caused injuries and damages to Plaintiffs and the Classes who are
16 entitled to bring this action for three times their actual damages, as well as injunctive/equitable
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 78 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 87 of 274
1 251. At all relevant times, the Express Scripts RICO Defendants have been persons
2 under 18 U.S.C. 1961(3) because they are capable of holding, and do hold, a legal or
4 252. Section 1962(c) makes it unlawful for any person employed by or associated
5 with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce,
6 to conduct or participate, directly or indirectly, in the conduct of such enterprises affairs through
8 253. Section 1962(d) makes it unlawful for any person to conspire to violate Section
10 254. As explained in detail below, Defendant Express Scripts sought to infiltrate the
11 business arrangement established between four manufacturers of test stripsRoche, Johnson &
12 Johnson, Bayer, and Abbotthealth plans, and insurance companies across the country through
13 a fraudulent scheme designed to secure greater profits and market share, increase the cost of test
14 strips, secure a favorable formulary position for Roche, Johnson & Johnson, Bayer, and Abbotts
15 test strips, and extract millions of dollars of revenue from Plaintiffs and the Classes. As
16 explained in detail below, the Express Scripts RICO Defendants years-long misconduct violated
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 79 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 88 of 274
1 services on behalf of health plans that offer prescription benefits and negotiating with
3 257. In the past decade, however, Express Scripts and other PBMs began to exert
5 certain drugs and other medical products in the marketplace by offering to include or threatening
6 to exclude certain medications from some or all of their formularies and, in the process,
7 extracting hundreds of millions of dollars in the form of discounts or rebate payments from
8 manufacturers in exchange.
10 however, take place in complex, closed-door meetings, during which PBMs sell access to their
11 formularies in exchange for large rebates or discounts, a substantial portion of which they pocket
12 as pure profit.
13 259. In order to facilitate the payment of rebates to PBMs, and ensure their position
14 on certain formularies without impacting their bottom line, diabetes test strip manufacturers,
15 including the Manufacturer Defendants, participate in a scheme with Express Scripts, and other
16 PBMs, to increase the list price of their test strips instead of competing on cost with other
18 260. This scheme to increase the profits of PBMs through artificially increasing the list
19 price of test strips benefits everyone in the industrys supply chain except Plaintiffs and the
20 Classes, who are left paying fraudulently obtained, exorbitant, and ever-increasing prices for
22 261. At all relevant times, each of the Manufacturer Defendants and Express Scripts
24 1961(4), through which the members of that enterprise conducted a pattern of racketeering
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 80 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 89 of 274
1 262. Alternatively, each of the Express Scripts RICO Defendants constitutes a single
2 legal entity enterprise within the meaning of 18 U.S.C. 1961(4), through which the Express
3 Scripts RICO Defendants conducted a pattern of racketeering activity. The Express Scripts RICO
4 Defendants separate legal statuses facilitated the fraudulent scheme and provided a hoped-for
5 shield from liability for the Express Scripts RICO Defendants and their co-conspirators. The
6 enterprises, alleged in this and the previous paragraph, are referred to collectively as the
8 263. At all relevant times, the Express Scripts RICO Enterprise constituted a single
9 enterprise or multiple enterprises within the meaning of 18 U.S.C. 1961(4), as legal entities,
10 as well as individuals and legal entities associated-in-fact for the common purpose of engaging in
12 264. For all of the above alternatives, the association-in-fact Express Scripts RICO
13 Enterprise consisted of the following entities and individuals: (a) Express Scripts, its
14 subsidiaries, executives, employees, and agents; (b) Roche, its subsidiaries, executives,
15 employees, and agents; (c) Johnson & Johnson, its subsidiaries, executives, employees, and
16 agents; (d) Bayer, its subsidiaries, executives, employees, and agents; and (e) Abbott, its
18 265. While each of the Express Scripts RICO Defendants acquired, maintained control
19 of, were associated with, and conducted or participated in the conduct of the Express Scripts
20 RICO Enterprises affairs, at all relevant times, the Express Scripts RICO Enterprise: (a) had an
21 existence separate and distinct from each Express Scripts RICO Defendant; (b) was separate and
22 distinct from the pattern of racketeering in which the Express Scripts RICO Defendants engaged;
23 and (c) was an ongoing and continuing organization consisting of legal entities, including the
24 Express Scripts RICO Defendants, along with other individuals and entities, including unknown
25 third parties.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 81 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 90 of 274
1 266. The Express Scripts RICO Defendants and their co-conspirators, through their
2 illegal Express Scripts RICO Enterprise, engaged in a pattern of racketeering activity, which
3 involved a fraudulent scheme to increase revenue for the Express Scripts RICO Defendants and
4 the other entities and individuals associated-in-fact with the Express Scripts RICO Enterprises
5 activities by selling test strips at an inflated and artificial price (the Express Scripts RICO
6 Scheme).
7 267. Express Scripts orchestrated the Express Scripts RICO Scheme, whereby Express
8 Scripts, as a PBM, leveraged its dominant position in the insurance market to demand that
9 diabetes test strip manufacturers, like Roche, Johnson & Johnson, Bayer, and Abbott, pay
10 substantial kickbacks in order to have their products included or be given priority on Express
11 Scripts formularies.
12 268. The Manufacturer Defendants facilitated the Express Scripts RICO Scheme by
14 maintain access to its formularies and funding those discounts by artificially increasing the list
16 269. In furtherance of the scheme, the Express Scripts RICO Defendants each
17 affirmatively misrepresented or concealed the existence of the inflated and fraudulent nature of
18 these list price increases as well as the existence, amount, and purpose of the discounts given to
19 Express Scripts to Plaintiffs, the Classes, consumers, health care payers, and the general public.
20 Specifically, the Express Scripts RICO Defendants claimed that the rebates paid to Express
21 Scripts were for the purpose of lowering costs when, in fact, they were quid pro quo payments
22 for formulary access that had the opposite effect for Plaintiffs and the members of the Classes.
2 favorable position on one, or a number of Express Scripts formularies, translating into higher
3 sales and profits for each of these manufacturers. And because the Manufacturer Defendants
4 financed the payment of rebates by inflating the list prices for their test strips, they maintained
6 272. At all relevant times, the Express Scripts RICO Enterprise: (a) had an existence
7 separate and distinct from each Express Scripts RICO Defendant; (b) was separate and distinct
8 from the pattern of racketeering in which the Express Scripts RICO Defendants engaged; and (c)
9 was an ongoing and continuing organization consisting of legal entities, including the Express
10 Scripts RICO Defendants, along with other individuals and entities, including unknown third
11 parties that operated an association-in-fact enterprise, which was formed for the purpose of
12 ensuring that one or more of the Manufacturer Defendants test strips were included on Express
13 Scripts formularies and increasing Express Scripts profits by fraudulently and artificially
14 increasing the list price of those test strip products at the expense of Plaintiffs and the Classes,
16 273. The Express Scripts RICO Defendants and their co-conspirators, through their
18 scheme to increase revenue for the Express Scripts RICO Defendants and the other entities and
19 individuals associated-in-fact with the Enterprises activities through the illegal scheme to sell
21 274. The Express Scripts RICO Enterprise engaged in, and its activities affected,
22 interstate and foreign commerce because it involved commercial activities across state
23 boundaries, such as the marketing, promotion, advertisement, distribution, and sale of test strips
24 throughout the country, and the receipt of monies from the sale of the same.
25 275. Within the Express Scripts RICO Enterprise, there was a common communication
26 network by which co-conspirators shared information on a regular basis. The Express Scripts
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 83 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 92 of 274
1 RICO Enterprise used this common communication network for purposes of marketing, pricing,
2 and engaging in negotiations regarding test strips, their pricing, and placement or position on
3 Express Scripts formularies and for furthering the Express Scripts RICO Scheme.
4 276. Each participant in the Express Scripts RICO Enterprise had systematic linkages
5 to each other through corporate ties, contractual relationships, financial ties, and a continuing
6 coordination of activities. Through the Express Scripts RICO Enterprise, the Express Scripts
7 RICO Defendants functioned as a continuing unit with the purpose of furthering the Express
9 277. The Express Scripts RICO Defendants participated in the operation and
10 management of the Express Scripts RICO Enterprise by directing its affairs, as described herein.
11 While the Express Scripts RICO Defendants participated in, and are members of, the enterprise,
12 they have a separate existence from the enterprise, including distinct legal statuses, different
13 offices and roles, bank accounts, officers, directors, employees, individual personhood, reporting
15 278. The Express Scripts RICO Defendants exerted substantial control over the
16 Express Scripts RICO Enterprise, and participated in the affairs of the enterprise by: (a)
17 negotiating and/or offering discounts for test strips; (b) misrepresenting and/or concealing the
18 existence, amount, or purpose of the discounts negotiated for test strips; (c) misrepresenting
19 and/or concealing the effect that the negotiated discounts had on the price of test strips for the
20 end payer; (d) negotiating and/or setting the list price for test strips; (e) misrepresenting and/or
21 concealing the true cost of test strips; (f) publishing, reproducing, and/or distributing documents
22 containing the list price for test strips; (g) negotiating and/or offering preferred formulary
23 placement for test strips; (h) misrepresenting and/or concealing the true nature of the relationship
24 and agreements between the members of the enterprise and its effect on the pricing of test strips;
25 (i) otherwise misrepresenting and/or concealing the inflated and fraudulent nature of the pricing
26 of test strips; (j) collecting discounts, revenues, and/or profits from the sale of test strips; and (k)
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 84 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 93 of 274
1 ensuring that the other Express Scripts RICO Defendants and unnamed co-conspirators complied
3 279. Without each Express Scripts RICO Defendants willing participation, the
4 Express Scripts RICO Scheme and common course of conduct would not have been successful.
5 280. The Express Scripts RICO Defendants directed and controlled the ongoing
7 which Plaintiffs cannot fully know at present, because such information lies in the Defendants
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 85 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 94 of 274
1 284. The Express Scripts RICO Defendants used, directed the use of, and/or caused to
2 be used, thousands of interstate mail and wire communications in service of their scheme
4 285. In devising and executing the illegal scheme, the Express Scripts RICO
5 Defendants devised and knowingly carried out a material scheme and/or artifice to defraud
6 Plaintiffs and the Classes or to obtain money from Plaintiffs and the Classes by means of
8 For the purpose of executing the illegal scheme, the Express Scripts RICO Defendants
9 committed these racketeering acts, which number in the thousands, intentionally and knowingly
11 286. The Express Scripts RICO Defendants predicate acts of racketeering (18 U.S.C.
13 (a) Mail Fraud: The Express Scripts RICO Defendants violated 18 U.S.C.
1341 by sending or receiving, or by causing to be sent and/or received, materials
14 via U.S. mail or commercial interstate carriers for the purpose of executing the
15 unlawful scheme to design, manufacture, market, price, and/or sell test strips by
means of false pretenses, misrepresentations, promises, and omissions.
16
(b) Wire Fraud: The Express Scripts RICO Defendants violated 18 U.S.C.
17 1343 by transmitting and/or receiving, or by causing to be transmitted and/or
received, materials by wire for the purpose of executing the unlawful scheme to
18 defraud and obtain money on false pretenses, misrepresentations, promises, and
19 omissions.
20 287. The Express Scripts RICO Defendants use of the mails and wires include, but are
21 not limited to: (a) the transmission of marketing or other materials indicating, setting, or
22 negotiating the price of test strips; (b) the transmission of marketing or other materials indicating
23 or advertising that any of the Express Scripts RICO Defendants reduce the price of test strips; (c)
24 written, telephone, or electronic communications regarding and/or negotiating the price of test
25 strips; (d) written, telephone, or electronic communications regarding and/or negotiating
26 discounts and/or rebates for test strips; (e) written, telephone, or electronic communications
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 86 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 95 of 274
1 regarding the existence, amount, or purpose of discounts and/or rebates for test strips; (f) the
2 transmission and/or distribution of test strips through the mails; and (g) the use of the mails or
3 wires to bill for or collect discounts, revenues, and/or profits from the sale of such test strips.
4 288. The Express Scripts RICO Defendants also communicated by U.S. mail, by
5 interstate facsimile, and by interstate electronic mail with various other affiliates, regional
6 offices, divisions, dealerships, and other third-party entities in furtherance of the scheme.
7 289. The mail and wire transmissions described herein were made in furtherance of
8 Defendants scheme and common course of conduct designed to increase the cost of test strips
9 and fraudulently extract hundreds of millions of dollars of revenue from Plaintiffs and the
10 Classes.
11 290. Many of the precise dates of the fraudulent uses of the U.S. mail and interstate
12 wire facilities have been deliberately hidden, and cannot be alleged without access to
13 Defendants books and records. However, Plaintiffs have described the types of predicate acts of
14 mail and/or wire fraud. They include thousands of communications to perpetuate and maintain
16 291. The Express Scripts RICO Defendants have not undertaken the practices
17 described herein in isolation, but as part of a common scheme and conspiracy. In violation of 18
18 U.S.C. 1962(d), the Express Scripts RICO Defendants conspired to violate 18 U.S.C.
19 1962(c), as described herein. Various other persons, firms, and corporations, including third-
20 party entities and individuals not named as defendants in this Complaint, have participated as co-
21 conspirators with the Express Scripts RICO Defendants in these offenses and have performed
22 acts in furtherance of the conspiracy to increase or maintain revenues, increase market share,
23 and/or minimize losses for the Defendants and their unnamed co-conspirators throughout the
25 292. The Express Scripts RICO Defendants aided and abetted others in the violations
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 87 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 96 of 274
1 293. To achieve their common goals, the Express Scripts RICO Defendants hid from
2 Plaintiffs, the Classes, insurers, health plans, and the general public the true net price of test
3 strips, the inflated and fraudulent nature of the list price of test strips, the relationship between
4 the Express Scripts RICO Defendants and their impact upon the price of test strips, and the
5 existence, amount, and purpose of rebates and discounts given for test strips, and the portion of
7 294. The Express Scripts RICO Defendants and each member of the conspiracy, with
8 knowledge and intent, agreed to the overall objectives of the conspiracy and participated in the
9 common course of conduct. Indeed, for the conspiracy to succeed, each of the Express Scripts
10 RICO Defendants and their co-conspirators had to agree to conceal their fraudulent negotiations
12 295. The Express Scripts RICO Defendants knew, and intended that, Plaintiffs and
13 Class members would rely on the material misrepresentations and omissions made by them and
14 incur increased costs as a result. Indeed, if Plaintiffs and the Classes did not make inflated
15 payments for test strips, the Express Scripts RICO scheme could not succeed.
16 296. As described herein, the Express Scripts RICO Defendants engaged in a pattern of
17 related and continuous predicate acts for years. The predicate acts constituted a variety of
18 unlawful activities, each conducted with the common purpose of obtaining significant monies
19 and revenues from Plaintiffs and the Classes based on their misrepresentations and omissions,
20 while providing test strips that were worth significantly less than the purchase price paid. The
21 predicate acts also had the same or similar results, participants, victims, and methods of
22 commission. The predicate acts were related and not isolated events.
23 297. During the Express Scripts RICO Defendants determination of discounts and/or
24 rebates for test strips, the true purpose of the discounts, the true cost of test strips, and the
25 inflated and fraudulent nature of their pricing was revealed to each of the Express Scripts RICO
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 88 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 97 of 274
1 misrepresentations regarding the true cost of test strips as well as the existence, amount, and
3 298. By reason of, and as a result of the conduct of the Express Scripts RICO
4 Defendants, and in particular, their pattern of racketeering activity, Plaintiffs and the Classes
5 have been injured in their business and/or property in multiple ways, including but not limited to
7 299. The Express Scripts RICO Defendants violations of 18 U.S.C. 1962(c) and (d)
8 have directly and proximately caused injuries and damages to Plaintiffs and the Classes who are
9 entitled to bring this action for three times their actual damages, as well as injunctive/equitable
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 89 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 98 of 274
1 304. Section 1962(d) makes it unlawful for any person to conspire to violate Section
4 business arrangement established between four manufacturers of test stripsRoche, Johnson &
5 Johnson, Bayer, and Abbotthealth plans, and insurance companies across the country through
6 a fraudulent scheme designed to secure greater profits and market share, increase the cost of test
7 strips, secure a favorable formulary position for Roche, Johnson & Johnson, Bayer, and Abbotts
8 test strips, and extract millions of dollars of revenue from Plaintiffs and the Classes. As
9 explained in detail below, the OptumRx RICO Defendants years-long misconduct violated
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 90 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 99 of 274
2 however, take place in complex, closed-door meetings, during which PBMs sell access to their
3 formularies in exchange for large rebates or discounts, a substantial portion of which they pocket
4 as pure profit.
5 310. In order to facilitate the payment of rebates to PBMs, and ensure their position
6 on certain formularies without impacting their bottom line, diabetes test strip manufacturers,
7 including the Manufacturer Defendants, participated in a scheme with OptumRx, and other
8 PBMs, to increase the list price of their test strips instead of competing on cost with other
10 311. This scheme to increase the profits of PBMs through artificially increasing the list
11 price of test strips benefits everyone in the industrys supply chain except Plaintiffs and the
12 Classes, who are left paying fraudulently obtained, exorbitant, and ever-increasing prices for
14 312. At all relevant times, each of the Manufacturer Defendants and OptumRx
16 1961(4), through which the members of that enterprise conducted a pattern of racketeering
18 313. Alternatively, each of the OptumRx RICO Defendants constitutes a single legal
19 entity enterprise within the meaning of 18 U.S.C. 1961(4), through which the OptumRx
20 RICO Defendants conducted a pattern of racketeering activity. The OptumRx RICO Defendants
21 separate legal statuses facilitated the fraudulent scheme and provided a hoped-for shield from
22 liability for the OptumRx RICO Defendants and their co-conspirators. The enterprises, alleged in
23 this and the previous paragraph, are referred to collectively as the OptumRx RICO Enterprise.
24 314. At all relevant times, the OptumRx RICO Enterprise constituted a single
25 enterprise or multiple enterprises within the meaning of 18 U.S.C. 1961(4), as legal entities,
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 91 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 100 of 274
1 as well as individuals and legal entities associated-in-fact for the common purpose of engaging in
3 315. For all of the above alternatives, the OptumRx RICO Defendants include the
4 following entities and individuals: (a) OptumRx, its subsidiaries, executives, employees, and
5 agents; (b) Roche, its subsidiaries, executives, employees, and agents; (c) Johnson & Johnson, its
6 subsidiaries, executives, employees, and agents; (d) Bayer, its subsidiaries, executives,
7 employees, and agents; and (e) Abbott, its subsidiaries, executives, employees, and agents.
8 316. While each of the OptumRx RICO Defendants acquired, maintained control of,
9 were associated with, and conducted or participated in the conduct of the OptumRx RICO
10 Enterprises affairs, at all relevant times, the OptumRx RICO Enterprise: (a) had an existence
11 separate and distinct from each OptumRx RICO Defendant; (b) was separate and distinct from
12 the pattern of racketeering in which the OptumRx RICO Defendants engaged; and (c) was an
13 ongoing and continuing organization consisting of legal entities, including the OptumRx RICO
14 Defendants, along with other individuals and entities, including unknown third parties.
15 317. The OptumRx RICO Defendants and their co-conspirators, through their illegal
17 fraudulent scheme to increase revenue for the OptumRx RICO Defendants and the other entities
18 and individuals associated-in-fact with the OptumRx RICO Enterprises activities by selling test
21 PBM, leveraged its dominant position in the insurance market to demand that diabetes test strip
22 manufacturers, like Roche, Johnson & Johnson, Bayer, and Abbott, pay substantial kickbacks in
24 319. The Manufacturer Defendants facilitated the OptumRx RICO Scheme by agreeing
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 92 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 101 of 274
1 its formularies and funding those discounts by artificially increasing the list price of their test
2 strip products.
3 320. In furtherance of the scheme, the OptumRx RICO Defendants each affirmatively
4 misrepresented or concealed the existence of the inflated and fraudulent nature of these list price
5 increases as well as the existence, amount, and purpose of the discounts given to OptumRx to
6 Plaintiffs, the Classes, consumers, health care payers, and the general public. Specifically, the
7 OptumRx RICO Defendants claimed that the rebates paid to OptumRx were for the purpose of
8 lowering costs when, in fact, they were quid pro quo payments for formulary access that had the
1 those test strip products at the expense of Plaintiffs and the Classes, and paying rebates from the
3 324. The OptumRx RICO Defendants and their co-conspirators, through their illegal
5 increase revenue for the OptumRx RICO Defendants and the other entities and individuals
6 associated-in-fact with the Enterprises activities through the illegal scheme to sell test strips at
8 325. The OptumRx RICO Enterprise engaged in, and its activities affected, interstate
9 and foreign commerce because it involved commercial activities across state boundaries, such as
10 the marketing, promotion, advertisement, distribution, and sale of test strips throughout the
11 country, and the receipt of monies from the sale of the same.
12 326. Within the OptumRx RICO Enterprise, there was a common communication
13 network by which co-conspirators shared information on a regular basis. The OptumRx RICO
14 Enterprise used this common communication network for purposes of marketing, pricing, and
15 engaging in negotiations regarding test strips, their pricing, and placement or position on
17 327. Each participant in the OptumRx RICO Enterprise had systematic linkages to
18 each other through corporate ties, contractual relationships, financial ties, and a continuing
19 coordination of activities. Through the OptumRx RICO Enterprise, the OptumRx RICO
20 Defendants functioned as a continuing unit with the purpose of furthering the OptumRx RICO
21 Scheme.
22 328. The OptumRx RICO Defendants participated in the operation and management of
23 the OptumRx RICO Enterprise by directing its affairs, as described herein. While the OptumRx
24 RICO Defendants participated in, and are members of, the enterprise, they have a separate
25 existence from the enterprise, including distinct legal statuses, different offices and roles, bank
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 94 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 103 of 274
2 financial statements.
3 329. The OptumRx RICO Defendants exerted substantial control over the OptumRx
4 RICO Enterprise, and participated in the affairs of the enterprise by: (a) negotiating and/or
5 offering discounts for test strips; (b) misrepresenting and/or concealing the existence, amount, or
6 purpose of the discounts negotiated for test strips; (c) misrepresenting and/or concealing the
7 effect that the negotiated discounts had on the price of test strips for the end payer; (d)
8 negotiating and/or setting the list price for test strips; (e) misrepresenting and/or concealing the
9 true cost of test strips; (f) publishing, reproducing, and/or distributing documents containing the
10 list price for test strips; (g) negotiating and/or offering preferred formulary placement for test
11 strips; (h) misrepresenting and/or concealing the true nature of the relationship and agreements
12 between the members of the enterprise and its effect on the pricing of test strips; (i) otherwise
13 misrepresenting and/or concealing the inflated and fraudulent nature of the pricing of test strips;
14 (j) collecting discounts, revenues, and/or profits from the sale of test strips; and (k) ensuring that
15 the other OptumRx RICO Defendants and unnamed co-conspirators complied with and
17 330. Without each OptumRx RICO Defendants willing participation, the OptumRx
18 RICO Scheme and common course of conduct would not have been successful.
19 331. The OptumRx RICO Defendants directed and controlled the ongoing organization
20 necessary to implement the scheme at meetings and through communications of which Plaintiffs
21 cannot fully know at present, because such information lies in the Defendants and others hands.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 95 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 104 of 274
1 1961(5) and 1962(c), and employed the use of the mail and wire facilities, in violation of 18
4 commit, and/or aided and abetted in the commission of, at least two predicate acts of
5 racketeering activity (i.e., violations of 18 U.S.C. 1341 and 1343), within the past ten years.
6 334. The multiple acts of racketeering activity which the OptumRx RICO Defendants
7 committed, or aided or abetted in the commission of, were related to each other, posed a threat of
8 continued racketeering activity, and therefore constitute a pattern of racketeering activity. The
9 racketeering activity was made possible by the OptumRx RICO Defendants regular use of the
10 facilities, services, distribution channels, and employees of the OptumRx RICO Enterprise. The
11 OptumRx RICO Defendants participated in the scheme to defraud by using mail, telephone, and
13 335. The OptumRx RICO Defendants used, directed the use of, and/or caused to be
14 used, thousands of interstate mail and wire communications in service of their scheme through
16 336. In devising and executing the illegal scheme, the OptumRx RICO Defendants
17 devised and knowingly carried out a material scheme and/or artifice to defraud Plaintiffs and the
18 Classes or to obtain money from Plaintiffs and the Classes by means of materially false or
19 fraudulent pretenses, representations, promises, or omissions of material facts. For the purpose of
20 executing the illegal scheme, the OptumRx RICO Defendants committed these racketeering acts,
21 which number in the thousands, intentionally and knowingly with the specific intent to advance
23 337. The OptumRx RICO Defendants predicate acts of racketeering (18 U.S.C.
25 (a) Mail Fraud: The OptumRx RICO Defendants violated 18 U.S.C. 1341
by sending or receiving, or by causing to be sent and/or received, materials via
26 U.S. mail or commercial interstate carriers for the purpose of executing the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 96 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 105 of 274
1 unlawful scheme to design, manufacture, market, price, and/or sell test strips by
means of false pretenses, misrepresentations, promises, and omissions.
2
(b) Wire Fraud: The OptumRx RICO Defendants violated 18 U.S.C. 1343
3 by transmitting and/or receiving, or by causing to be transmitted and/or received,
4 materials by wire for the purpose of executing the unlawful scheme to defraud
and obtain money on false pretenses, misrepresentations, promises, and
5 omissions.
6
338. The OptumRx RICO Defendants use of the mails and wires include, but are not
7
limited to: (a) the transmission of marketing or other materials indicating, setting, or negotiating
8
the price of test strips; (b) the transmission of marketing or other materials indicating or
9
advertising that any of the OptumRx RICO Defendants reduce the price of test strips; (c) written,
10
telephone, or electronic communications regarding and/or negotiating the price of test strips; (d)
11
written, telephone, or electronic communications regarding and/or negotiating discounts and/or
12
rebates for test strips; (e) written, telephone, or electronic communications regarding the
13
existence, amount, or purpose of discounts and/or rebates for test strips; (f) the transmission
14
and/or distribution of test strips through the mails; and (g) the use of the mails or wires to bill for
15
or collect discounts, revenues, and/or profits from the sale of such test strips.
16
339. The OptumRx RICO Defendants also communicated by U.S. mail, by interstate
17
facsimile, and by interstate electronic mail with various other affiliates, regional offices,
18
divisions, dealerships, and other third-party entities in furtherance of the scheme.
19
340. The mail and wire transmissions described herein were made in furtherance of
20
Defendants scheme and common course of conduct designed to increase the cost of test strips
21
and fraudulently extract hundreds of millions of dollars of revenue from Plaintiffs and the
22
Classes.
23
341. Many of the precise dates of the fraudulent uses of the U.S. mail and interstate
24
wire facilities have been deliberately hidden, and cannot be alleged without access to
25
Defendants books and records. However, Plaintiffs have described the types of predicate acts of
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 97 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 106 of 274
1 mail and/or wire fraud. They include thousands of communications to perpetuate and maintain
3 342. The OptumRx RICO Defendants have not undertaken the practices described
4 herein in isolation, but as part of a common scheme and conspiracy. In violation of 18 U.S.C.
5 1962(d), the OptumRx RICO Defendants conspired to violate 18 U.S.C. 1962(c), as described
6 herein. Various other persons, firms, and corporations, including third-party entities and
7 individuals not named as defendants in this Complaint, have participated as co-conspirators with
8 the OptumRx RICO Defendants in these offenses and have performed acts in furtherance of the
9 conspiracy to increase or maintain revenues, increase market share, and/or minimize losses for
10 the Defendants and their unnamed co-conspirators throughout the illegal scheme and common
11 course of conduct.
12 343. The OptumRx RICO Defendants aided and abetted others in the violations of the
13 above laws.
14 344. To achieve their common goals, the OptumRx RICO Defendants hid from
15 Plaintiffs, the Classes, insurers, health plans, and the general public the true net price of test
16 strips, the inflated and fraudulent nature of the list price of test strips, the relationship between
17 the OptumRx RICO Defendants and their impact upon the price of test strips, and the existence,
18 amount, and purpose of rebates and discounts given for test strips, and the portion of the rebates
20 345. The OptumRx RICO Defendants and each member of the conspiracy, with
21 knowledge and intent, agreed to the overall objectives of the conspiracy and participated in the
22 common course of conduct. Indeed, for the conspiracy to succeed, each of the OptumRx RICO
23 Defendants and their co-conspirators had to agree to conceal their fraudulent negotiations and
24 pricing tactics.
25 346. The OptumRx RICO Defendants knew, and intended that, Plaintiffs and Class
26 members would rely on the material misrepresentations and omissions made by them and incur
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 98 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 107 of 274
1 increased costs as a result. Indeed, if Plaintiffs and the Classes did not make inflated payments
2 for test strips, the OptumRx RICO Scheme could not succeed.
4 related and continuous predicate acts for years. The predicate acts constituted a variety of
5 unlawful activities, each conducted with the common purpose of obtaining significant monies
6 and revenues from Plaintiffs and the Classes based on their misrepresentations and omissions,
7 while providing test strips that were worth significantly less than the purchase price paid. The
8 predicate acts also had the same or similar results, participants, victims, and methods of
9 commission. The predicate acts were related and not isolated events.
11 rebates for test strips, the true purpose of the discounts, the true cost of test strips, and the
12 inflated and fraudulent nature of their pricing was revealed to each of the OptumRx RICO
14 misrepresentations regarding the true cost of test strips as well as the existence, amount, and
16 349. By reason of, and as a result of the conduct of the OptumRx RICO Defendants,
17 and in particular, their pattern of racketeering activity, Plaintiffs and the Classes have been
18 injured in their business and/or property in multiple ways, including but not limited to paying
20 350. The OptumRx RICO Defendants violations of 18 U.S.C. 1962(c) and (d) have
21 directly and proximately caused injuries and damages to Plaintiffs and the Classes who are
22 entitled to bring this action for three times their actual damages, as well as injunctive/equitable
24
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 99 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 108 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 100 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 109 of 274
1 Plans and the plan assets of those ERISA Plans in their own self-interest, rather than in the
3 356. Second, by acting on behalf of the Manufacturer Defendants, who also stood to
4 profit from inflated diabetes test strip prices at the expense of the ERISA Plaintiffs and members
5 of the ERISA Classand thus had interests adverse to the affected participants and
6 beneficiariesthe PBM Defendants engaged in conflicted transactions each time they facilitated,
7 required, or allowed diabetes test strip price inflation and/or the payment of PBM Kickbacks, in
8 violation of ERISA 406(b)(2). Under this subsection of ERISA 406(b), plan assets need not
10 357. Third, the PBM Defendants received consideration for their own personal
11 accounts from other partiesincluding the Manufacturer Defendants, third parties, and the
12 members of the ERISA Classthat were dealing with ERISA Plans in connection with
14 358. The PBM Defendants prohibited transactions described herein not only profited
15 the PBM Defendants, but also injured the ERISA Plaintiffs and members of the ERISA Class,
16 who have suffered losses through the PBM Kickbacks that the PBM Defendants took through
19 beneficiary to bring a civil action: (A) to enjoin any act or practice which violates any provision
20 of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to
21 redress such violations or (ii) to enforce any provisions of this title or the terms of the plan. The
22 ERISA Plaintiffs 502(a)(3) claims are on behalf of all participants and beneficiaries of ERISA
23 Plans whose pharmacy benefits are managed and administered by the PBM Defendants,
24 regardless of the type of ERISA Plan it is and whether or not it is underwritten by an insurance
25 contract with a health insurer, to recover the portions of their copayments, coinsurance, and
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 101 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 110 of 274
1 deductible amounts paid for test strips at an inflated price due to the PBM Kickbacks described
2 herein.
3 360. Pursuant to ERISA 502(a)(3), 29 U.S.C. 1132(a)(3), the Court should order
4 equitable relief to the ERISA Plaintiffs and the ERISA Class, including but not limited to:
5 a. an accounting;
6 b. a surcharge;
8 d. disgorgement of profits;
9 e. an equitable lien;
10 f. a constructive trust;
11 g. restitution;
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 102 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 111 of 274
1 363. In leveraging their access to millions of dollars in diabetes test strip purchases
2 through ERISA Plans to which they had access and over whose plan assets they had or exercised
3 control for their own benefit or the benefit of third parties, and to the detriment of participants
4 and beneficiaries, the PBM Defendants have breached their fiduciary duties of loyalty and
5 prudence.
6 364. Further, in failing to put the interests of participants and beneficiaries first in
7 managing and administering pharmacy benefits, the PBM Defendants have breached their
8 fiduciary duty of loyalty. And in acting in their own self-interest and in the interest of their own
9 corporate affiliates, the PBM Defendants have violated the exclusive purpose standard.
10 365. The duty to disclose is part of the duty of loyalty. In concealing and failing to
11 disclose to the ERISA Class the fact or amount of the PBM Kickbacks, the inflation of list
12 prices, or the net price of test strips for which they were being charged, and in concealing and
13 failing to disclose to the ERISA Plaintiffs and the ERISA Class that plan participants were
14 paying inflated amounts for copayments and coinsurance, as well as deductible payments, the
15 PBM Defendants breached this duty. Further, both omissions and misrepresentations are
16 actionable under ERISAs disclosure obligations, and the type that occurred here are not subject
20 367. The ERISA Plaintiffs and the ERISA Class have been damaged and suffered
21 losses in the amount of the PBM Kickbacks the PBM Defendants took.
23 beneficiary to bring a civil action: (A) to enjoin any act or practice which violates any provision
24 of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to
25 redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 103 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 112 of 274
1 369. Pursuant to ERISA 502(a)(3), 29 U.S.C. 1132(a)(3), the Court should order
2 equitable relief to the ERISA Plaintiffs and the ERISA Class, including but not limited to:
3 a. an accounting;
4 b. a surcharge;
6 d. disgorgement of profits;
7 e. an equitable lien;
8 f. a constructive trust;
9 g. restitution;
2 c. Claims experience.
4 e. Medical history.
5 f. Genetic information.
7 domestic violence).
8 h. Disability.
(2) No application to benefits or exclusions. To the extent consistent with section
9 701, paragraph (1) shall not be construed
10 (A) to require a group health plan, or group health insurance
11 coverage, to provide particular benefits other than those provided
under the terms of such plan or coverage, or
12
(B) to prevent such a plan or coverage from establishing
13 limitations or restrictions on the amount, level, extent, or nature of
the benefits or coverage for similarly situated individuals enrolled
14 in the plan or coverage.
15
(3) Construction. For purposes of paragraph (1), rules for eligibility to enroll
16 under a plan include rules defining any applicable waiting periods for such
enrollment.
17
19 (1) In general. A group health plan, and a health insurance issuer offering health
insurance coverage in connection with a group health plan, may not require any
20 individual (as a condition of enrollment or continued enrollment under the plan)
to pay a premium or contribution which is greater than such premium or
21
contribution for a similarly situated individual enrolled in the plan on the basis of
22 any health status-related factor in relation to the individual or to an individual
enrolled under the plan as a dependent of the individual.
23
24 372. In setting the price for test strips and taking excessive and undisclosed rebate
25 payments, Defendants have required plan participants and beneficiaries who have a protected
26 disability condition and/or medical condition that requires test strips subject to Defendants
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 105 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 114 of 274
1 artificially inflated prices and undisclosed and excessive PBM Kickbacks to pay greater
2 premiums and contributions for their health plan benefits than those participants and
3 beneficiaries who do not have a protected disability or who do not need prescription test strips
4 subject to Defendants artificially inflated prices and undisclosed and excessive rebate payments.
5 373. Under Defendants scheme, the ERISA Plaintiffs and members of the ERISA
6 Class who needed prescription test strips subject to Defendants artificially inflated prices and
7 undisclosed and excessive PBM Kickbacks were required to pay hidden additional and/or higher
8 premiums in order to be able to use their benefits as enrollees, thus making the artificially
9 inflated prices and payment of PBM Kickbacks a condition of continued enrollment under their
10 ERISA Plans. Without paying inflated copayments, coinsurance, or deductible payments, above
11 and beyond the required participant contributions set forth in their plans, the ERISA Plaintiffs
12 and members of the ERISA Class could not obtain covered prescription medications under the
13 ERISA Plans, the effect of which is that they would not be enrolled in the Plans.
14 374. The ERISA Plaintiffs and the ERISA Class have been damaged and suffered
15 losses in the amount of the PBM Kickback the PBM Defendants took, which were financed by
16 the inflated costs paid by the ERISA Plaintiffs and the ERISA Class for prescription test strips.
18 beneficiary to bring a civil action: (A) to enjoin any act or practice which violates any provision
19 of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to
20 redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.
21 376. Pursuant to ERISA 502(a)(3), 29 U.S.C. 1132(a)(3), the Court should order
22 equitable relief to the ERISA Plaintiffs and the ERISA Class, including but not limited to:
23 a. an accounting;
24 b. surcharge;
26 d. disgorgement of profits;
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 106 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 115 of 274
1 e. an equitable lien;
2 f. a constructive trust;
3 g. restitution;
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 107 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 116 of 274
1 the PBM Defendants and the Manufacturer Defendants. The PBM Defendants collected and/or
2 paid these amounts to themselves, their affiliates, or third parties from plan assets or generated
3 them through improper leveraging of plan assets and/or their relationships with and access to
4 ERISA Plans. The PBM Defendants facilitation of profits to the Manufacturer Defendants due
5 to inflated prices for test strips harmed the ERISA Class, and the Manufacturer Defendants are
7 381. Pursuant to ERISA 502(a)(3), 29 U.S.C. 1132(a)(3), the Court should order
8 equitable relief to the ERISA Plaintiffs and the ERISA Class, including but not limited to:
9 a. an accounting;
10 b. a surcharge;
12 d. disgorgement of profits;
13 e. an equitable lien;
14 f. a constructive trust;
15 g. restitution;
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 108 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 117 of 274
1 State of Alabama during the relevant time period (the Alabama members of the Classes)
3 384. Plaintiffs and the Alabama members of the Classes are consumers within the
5 385. Plaintiffs, the Alabama members of the Classes, and Defendants are persons
7 386. The test strip products described herein are goods within the meaning of Ala.
8 Code 8-19-3(3).
9 387. The Defendants are and were engaged in trade or commerce within the meaning
10 of Ala. Code 8-19-3(8) during all relevant periods by, at a minimum, advertising, offering for
11 sale, and selling the test strip products described herein in Alabama, to Alabama members of the
13 388. The Alabama Deceptive Trade Practices Act (Alabama DTPA), Ala. Code 8-
14 19-1, et seq., declares several specific actions to be unlawful, including: (2) Causing confusion
16 services, (5) Representing that goods or services have sponsorship, approval, characteristics,
17 ingredients, uses, benefits, or qualities that they do not have, (7) Representing that goods or
18 services are of a particular standard, quality, or grade, or that goods are of a particular style or
19 model, if they are of another, (11) Making a false or misleading statement of fact concerning
20 the reasons for, existence of, or amounts of, price reductions, and (27) Engaging in any other
23 389. As detailed above, the Defendants engaged in misleading, false and deceptive acts
24 in violation of the above-noted provisions of the Alabama DTPA by, at a minimum: (1) making
25 misleading statements regarding the true cost of the price of test strips or causing reasonable
26 inferences about the cost that had the tendency to mislead consumers, including but not limited
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 109 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 118 of 274
1 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
2 concerning the role that Defendants played in setting the price paid for test strips, including but
3 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
4 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
5 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
6 for test strips; (4) making material misrepresentations regarding or failing to disclose the
7 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
8 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
9 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
11 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
12 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
13 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
15 390. The Defendants owed and continue to owe Plaintiffs and the Alabama members
16 of the Classes a duty to refrain from the above-described unfair and deceptive practices and
17 disclose the true nature of the pricing of the test strip products described herein.
18 391. The Defendants knew or should have known that their conduct was in violation of
20 392. Despite knowing the true nature of their products and practices for years, the
22 regarding the quality and characteristics of the test strip products described herein, with the
23 intent to mislead regulators, Plaintiffs and the Alabama members of the Classes, and continued to
25 393. The Defendants unfair and deceptive acts or practices, omissions and
26 misrepresentations were material to Plaintiffs and the Alabama members of the Classes, and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 110 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 119 of 274
1 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
3 394. Plaintiffs and other Alabama members of the Classes relied upon Defendants
4 material misrepresentations and omissions regarding the test strip products described herein, as
5 set forth above. These material misrepresentations by the Defendants proximately caused
6 Plaintiffs and the Alabama members of the Classes to overpay for the test strip products
7 described herein. Because the Defendants did not reveal the true nature of the Test Strip Pricing
8 Scheme as described herein before this lawsuit was filed, the statute of limitation for filing
9 claims against the Defendants under the Alabama DTPA did not begin to accrue until the filing
10 of this lawsuit. The Defendants either concealed or failed to reveal the facts until this filing.
11 395. Plaintiffs and the Alabama members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of the Defendants unfair
13 and deceptive practices and omissions and/or misrepresentations, at a minimum, in the form of
14 increased and unfair prices paid for the test strip products described herein.
15 396. The Defendants violations present a continuing risk to Plaintiffs as well as to the
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, the Defendants unlawful acts and practices complained of herein affect the public interest.
18 397. Pursuant to Ala. Code 8-19-10, Plaintiffs and the Alabama members of the
19 Classes seek monetary relief against the Defendants measured as the greater of (a) actual
20 damages in an amount to be determined at trial and (b) statutory damages in the amount of $100
22 398. Plaintiffs also seek an order enjoining the Defendants unfair, unlawful, and/or
23 deceptive practices, attorneys fees, and any other just and proper relief available under the Ala.
25 399. On or about the date of the filing of this action, certain Plaintiffs sent a letter
26 complying with Ala. Code 8-19-10(e). If Defendants fail to remedy their unlawful conduct
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 111 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 120 of 274
1 within the requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 112 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 121 of 274
1 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
2 concerning the role that Defendants played in setting the price paid for test strips, including but
3 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
4 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
5 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
6 for test strips; (4) making material misrepresentations regarding or failing to disclose the
7 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
8 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
9 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
11 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
12 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
13 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
15 404. The foregoing violations caused harm to Plaintiffs and the Alaska members of the
16 Classes, and are likely to harm consumers in the future if Defendants practices are not stopped.
17 405. Plaintiffs and the Alaska members of the Classes seek to recover against each
18 Defendant the amount of (a) three times the actual damages in an amount to be determined at
19 trial or (b) $500 for each plaintiff, whichever is greater. Alaska Stat. 45.50.531
20 406. Plaintiffs additionally request the Court to enjoin each Defendants unfair,
22 407. Also, Plaintiffs seek attorneys fees and any other relief available under the
23 Alaska CPA.
24 408. Certain Plaintiffs will send letters complying with Alaska Stat. 45.50.535(b)(1)
25 on or about the date of the filing of this Complaint. This Count is a placeholder only and will be
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 113 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 122 of 274
1 formally asserted thirty (30) days after demand letters are sent if Defendants fail to remedy their
2 unlawful conduct.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 114 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 123 of 274
1 the price of test strips or causing reasonable inferences about the cost that had the tendency to
2 mislead consumers, including but not limited to publishing, setting, or distributing the list price
3 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
4 the price paid for test strips, including but not limited to marketing material averring that the
5 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
6 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
7 and/or charged by the Manufacturer Defendants for test strips; (4) making material
9 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
10 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
11 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
13 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
14 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
15 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
16 point.
17 415. The Defendants owed and continue to owe Plaintiffs and the Arizona members of
18 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
19 the true nature of the pricing of the test strip products described herein.
20 416. The Defendants knew or should have known that their conduct was in violation of
22 417. Despite knowing the true nature of their products and practices for years, the
24 regarding the quality and characteristics of the test strip products described herein, with the
25 intent to mislead regulators, Plaintiffs and the Arizona members of the Classes, and continued to
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 115 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 124 of 274
1 418. The Defendants violations present a continuing risk to Plaintiffs and the Arizona
2 members of the Classes as well as to the general public, who in many cases are unable to afford
3 or gain access to test strip products. As such, the Defendants unlawful acts and practices
5 419. The Defendants unfair and deceptive acts or practices, omissions and
6 misrepresentations were material to Plaintiffs and the Arizona members of the Classes, and were
7 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
9 420. Plaintiffs and Arizona members of the Classes relied upon the Defendants
10 material misrepresentations and omissions regarding the test strip products described herein, as
11 set forth above. These material misrepresentations by the Defendants proximately caused
12 Plaintiffs and the Arizona members of the Classes to overpay for test strip products. Because
13 Defendants did not reveal the true nature of the Test Strip Pricing Scheme, as described herein,
14 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
15 Arizona CFA did not begin to accrue until the filing of this lawsuit. Defendants either concealed
17 421. Plaintiffs and the Arizona members of the Classes suffered injury-in-fact,
18 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
20 increased and unfair prices paid for the test strip products described herein.
21 422. Plaintiffs and the Arizona members of the Classes seek monetary relief against
22 Defendants in an amount to be determined at trial. Plaintiffs and the Arizona members of the
23 Classes also seek punitive damages because Defendants engaged in aggravated and outrageous
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 116 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 125 of 274
1 423. Plaintiffs and the Arizona members of the Classes also seek an order enjoining
2 Defendants unfair, unlawful, and/or deceptive practices, attorneys fees, and any other just and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 117 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 126 of 274
1 material fact with intent that others rely upon the concealment, suppression, or omission. Ark.
3 429. In the course of their business, Defendants engaged in misleading, false and
4 deceptive acts in violation of the above-noted provisions of the Arkansas DTPA by, at a
5 minimum: (1) making misleading statements regarding the true cost of the price of test strips or
6 causing reasonable inferences about the cost that had the tendency to mislead consumers,
7 including but not limited to publishing, setting, or distributing the list price of test strips; (2)
8 engaging in advertising concerning the role that Defendants played in setting the price paid for
9 test strips, including but not limited to marketing material averring that the PBM Defendants
10 make efforts to decrease the price of prescription drugs and/or test strips for consumers; (3)
11 failing to disclose the inflated and/or fraudulent nature of the list price(s) set and/or charged by
12 the Manufacturer Defendants for test strips; (4) making material misrepresentations regarding or
13 failing to disclose the existence, amount, and/or purpose(s) of discounts, rebates, and/or other
14 payments offered by the Manufacturer Defendants to the PBM Defendants and/or negotiated by
15 the PBM Defendants in exchange for inclusion and/or tier placement of the Manufacturer
16 Defendants test strips on the PBM Defendants formularies; (5) making material
17 misrepresentations regarding or failing to disclose the portion of discounts, rebates, and/or other
18 payments from the Manufacturer Defendants that the PBM Defendants keep; and/or (6) engaging
19 in misleading, false, unfair and/or deceptive acts or practices by selling and/or facilitating the
20 sale of test strips at a grossly inflated and/or fraudulently obtained price point.
21 430. Defendants actions as set forth above occurred in the conduct of trade or
22 commerce.
23 431. Defendants owed and continue to owe Plaintiffs and the Arkansas members of the
24 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
25 true nature of the pricing of the test strip products described herein.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 118 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 127 of 274
2 misrepresentations were material to Plaintiffs and the Arkansas members of the Classes, and
3 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
5 433. Plaintiffs and other Arkansas members of the Classes relied upon Defendants
6 material misrepresentations and omissions regarding the test strip products, as set forth above.
7 These material misrepresentations by Defendants proximately caused Plaintiffs and the Arkansas
8 members of the Classes to overpay for the test strip products described herein. Because
9 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
10 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
11 Arkansas DTPA did not begin to accrue until the filing of this lawsuit. Defendants either
13 434. Defendants knew or should have known that their conduct was in violation of the
14 Arkansas DTPA.
15 435. Despite knowing the true nature of their products and practices for years,
17 regarding the quality and characteristics of the test strip products described herein, with the
18 intent to mislead regulators, Plaintiffs and other Arkansas members, and continued to engage in
20 436. Plaintiffs and the Arkansas members of the Classes suffered injury-in-fact,
21 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
23 increased and unfair prices paid for the test strip products described herein.
25 general public, who in many cases are unable to afford or gain access to test strip products. As
26 such, Defendants unlawful acts and practices complained of herein affect the public interest.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 119 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 128 of 274
1 438. Plaintiffs and the Arkansas members of the Classes seek monetary relief against
2 Defendants in an amount to be determined at trial. Plaintiffs and the Arkansas members of the
3 Classes also seek punitive damages because Defendants acted wantonly in causing the injury or
4 with such a conscious indifference to the consequences that malice may be inferred.
5 439. Plaintiffs and the Arkansas members of the Classes also seek an order enjoining
6 Defendants unfair, unlawful, and/or deceptive practices, attorneys fees, and any other just and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 120 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 129 of 274
1 446. Defendants conduct violates at least the following enumerated CLRA provisions:
4 b. Cal. Civ. Code 1770(a)(5): Representing that goods have characteristics, uses, and
6 c. Cal. Civ. Code 1770(a)(9): Advertising goods with intent not to sell them as
7 advertised.
9 and deceptive acts in violation of the above-noted provisions of the CLRA by, at a minimum: (1)
10 making misleading statements regarding the true cost of the price of test strips or causing
11 reasonable inferences about the cost that had the tendency to mislead consumers, including but
12 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
13 advertising concerning the role that Defendants played in setting the price paid for test strips,
14 including but not limited to marketing material averring that the PBM Defendants make efforts
15 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
16 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
17 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
18 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
19 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
20 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
21 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
22 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
23 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
24 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 121 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 130 of 274
1 448. Defendants owed and continue to owe Plaintiffs and the California members of
2 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
3 the true nature of the pricing of the test strip products described herein.
4 449. Defendants knew or should have known that their conduct was in violation of the
5 CLRA.
6 450. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the California members of the Classes, and continued
12 misrepresentations were material to Plaintiffs and the California members of the Classes, and
13 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 452. Plaintiffs and other California members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products, as set forth above.
18 California members of the Classes to overpay for the test strip products described herein.
19 Because Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described
20 herein until this lawsuit was filed, the statute of limitation for filing claims against Defendants
21 under the CLRA did not begin to accrue until the filing of this lawsuit. Defendants either
23 453. Plaintiffs and the California members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 122 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 131 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
4 455. Under Cal. Civ. Code 1780(a), Plaintiffs and the California members of the
6 456. Under Cal. Civ. Code 1780(b), Plaintiffs seek an additional award against
7 Defendants of up to $5,000 for each California member of the Classes who qualifies as a senior
8 citizen or disabled person under the CLRA. Defendants knew or should have known that
9 their conduct was directed to one or more California members of the Classes who are senior
10 citizens or disabled persons. Defendants conduct caused one or more of these senior citizens or
11 disabled persons to suffer a substantial loss of property set aside for retirement or for personal or
12 family care and maintenance, or assets essential to the health or welfare of the senior citizen or
13 disabled person. One or more California members of the Classes who are senior citizens or
14 disabled persons are substantially more vulnerable to Defendants conduct because of age, poor
15 health or infirmity, impaired understanding, restricted mobility, or disability, and each of them
17 conduct.
18 457. Plaintiffs also seek punitive damages against Defendants because they carried out
19 reprehensible conduct with willful and conscious disregard of the rights and safety of others,
20 subjecting Plaintiffs and the California members of the Classes to potential cruel and unjust
22 matters, and concealed material facts that only Defendants knew. Defendants unlawful conduct
23 constitutes malice, oppression, and fraud warranting punitive damages under Cal. Civ. Code
24 3294.
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 123 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 132 of 274
1 458. Plaintiffs further seek an order enjoining Defendants unfair or deceptive acts or
2 practices, restitution, punitive damages, costs of court, attorneys fees under Cal. Civ. Code
3 1780(e), and any other just and proper relief available under the CLRA.
4 459. Certain Plaintiffs have sent a letter complying with Cal. Civ. Code 1780(b) on
23 disseminated throughout California and the United States, through advertising, marketing and
24 other publications, statements that were untrue or misleading, and which were known, or which
25 by the exercise of reasonable care should have been known to Defendants to be untrue and
26 misleading to consumers, including Plaintiffs and the other members of the Classes.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 124 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 133 of 274
1 464. Defendants misrepresentations with respect to the design, cost, and efficacy of
2 Defendants test strip products were material and likely to, and did in fact, deceive reasonable
3 consumers.
4 465. Plaintiffs and the California members of the Classes have suffered an injury in
5 fact, as a result of Defendants unfair, unlawful, and/or deceptive practices, at a minimum, in the
6 form of increased and unfair prices paid for the test strip products described herein.
7 466. All of the wrongful conduct alleged herein occurred, and continues to occur, in
9 generalized course of conduct that is still perpetuated and repeated, both in the State of
11 467. Plaintiffs, individually and on behalf of the other California members of the
12 Classes, request that this Court enter such orders or judgments as may be necessary to enjoin
13 Defendants from continuing their unfair, unlawful, and/or deceptive practices and to restore to
14 Plaintiffs and the other Classes members any money Defendants acquired by their violations of
15 Californias False Advertising law, including restitution and/or restitutionary disgorgement, and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 125 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 134 of 274
1 470. California Business and Professions Code 17200 prohibits any unlawful,
4 and/or unlawful practices in violation of Californias Unfair Competition law by, at a minimum:
5 (1) making misleading statements regarding the true cost of the price of test strips or causing
6 reasonable inferences about the cost that had the tendency to mislead consumers, including but
7 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
8 advertising concerning the role that Defendants played in setting the price paid for test strips,
9 including but not limited to marketing material averring that the PBM Defendants make efforts
10 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
11 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
12 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
13 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
14 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
15 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
16 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
17 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
18 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
19 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
21 472. Defendants grossly excessive and unfair test strip pricing violates public policy
22 and is, as such, unlawful within the meaning of California Business and Professions Code
23 17200.
25 course of conduct in marketing and pricing the test strip products. In particular, the California
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 126 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 135 of 274
1 Senate and Assembly declared that unnecessary and unexplained increases in pharmaceutical
2 pricing is a harm to our health care system that will no longer be tolerated. . . .
3 474. California has a strong public policy favoring the fair and reasonable pricing of
4 health care:
5 a. Section 1374.21 of the California Health and Safety Code requires that individuals
6 and small business owners be notified if regulators find that the premium for their
8 b. The California Health and Safety Code contains an entire chapter focused on fair
9 pricing policies for hospitals and emergency physicians. See Cal. Health & Safety
11 c. In California Business & Professions Code 657, the legislature declared that:
1 477. Plaintiffs request that this Court enter such orders or judgments as may be
2 necessary to enjoin Defendants from continuing their unfair, unlawful, and/or deceptive practices
3 and to restore to Plaintiffs and California members of the Classes any money Defendants
5 provided in Cal. Bus. & Prof. Code 17203 and Cal. Bus. & Prof. Code 3345; and for such
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 128 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 137 of 274
1 disclose material information concerning goods, services, or property which information was
2 known at the time of an advertisement or sale if such failure to disclose such information was
3 intended to induce the consumer to enter into a transaction. Col. Rev. Stat 6-1-105.
5 the above-noted provisions of the Colorado Consumer Protection Act by, at a minimum: (1)
6 making misleading statements regarding the true cost of the price of test strips or causing
7 reasonable inferences about the cost that had the tendency to mislead consumers, including but
8 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
9 advertising concerning the role that Defendants played in setting the price paid for test strips,
10 including but not limited to marketing material averring that the PBM Defendants make efforts
11 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
12 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
13 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
14 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
15 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
16 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
17 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
18 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
19 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
20 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
23 through the unlawful conduct alleged herein, in violation of C.R.S. 6-1-105(1)(b), (1)(e), (1)(g),
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 129 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 138 of 274
1 485. Defendants owed and continue to owe Plaintiffs and the Colorado members of the
2 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
3 true nature of the pricing of the test strip products described herein.
4 486. Despite knowing the true nature of their products and practices for years,
6 regarding the quality and characteristics of the test strip products described herein, with the
7 intent to mislead regulators, Plaintiffs and the Colorado members of the Classes, and continued
10 misrepresentations were material to Plaintiffs and the Colorado members of the Classes, and
11 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
13 488. Plaintiffs and the Colorado members of the Classes relied upon Defendants
14 material misrepresentations and omissions regarding the test strip products, as set forth above.
15 These material misrepresentations by Defendants proximately caused Plaintiff and the Colorado
16 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
17 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
18 the statute of limitation for filing claims against Defendants under the Colorado CPA did not
19 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
21 489. Plaintiffs and the Colorado members of the Classes suffered injury-in-fact,
22 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
24 increased and unfair prices paid for the test strip products described herein.
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 130 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 139 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
4 491. Pursuant to Colo. Rev. Stat. 6-1-113, Plaintiffs, individually and on behalf of
5 the Colorado members of the Classes, seek monetary relief against Defendants measured as the
6 greater of (a) actual damages in an amount to be determined at trial and discretionary trebling of
7 such damages, or (b) statutory damages in the amount of $500 for each Plaintiff and each
9 492. Plaintiffs also seek an order enjoining Defendants unfair, unlawful, and/or
10 deceptive practices, declaratory relief, attorneys fees, and any other just and proper relief
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 131 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 140 of 274
1 for sale, and selling the test strip products described herein in Connecticut, to Connecticut
3 498. Plaintiffs and Connecticut members of the Classes purchased goods or services
6 competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.
8 500. In the course of their business, Defendants engaged in misleading, false and
9 deceptive acts in violation of the above-noted provisions of the Connecticut UTPA by, at a
10 minimum: (1) making misleading statements regarding the true cost of the price of test strips or
11 causing reasonable inferences about the cost that had the tendency to mislead consumers,
12 including but not limited to publishing, setting, or distributing the list price of test strips; (2)
13 engaging in advertising concerning the role that Defendants played in setting the price paid for
14 test strips, including but not limited to marketing material averring that the PBM Defendants
15 make efforts to decrease the price of prescription drugs and/or test strips for consumers; (3)
16 failing to disclose the inflated and/or fraudulent nature of the list price(s) set and/or charged by
17 the Manufacturer Defendants for test strips; (4) making material misrepresentations regarding or
18 failing to disclose the existence, amount, and/or purpose(s) of discounts, rebates, and/or other
19 payments offered by the Manufacturer Defendants to the PBM Defendants and/or negotiated by
20 the PBM Defendants in exchange for inclusion and/or tier placement of the Manufacturer
21 Defendants test strips on the PBM Defendants formularies; (5) making material
22 misrepresentations regarding or failing to disclose the portion of discounts, rebates, and/or other
23 payments from the Manufacturer Defendants that the PBM Defendants keep; and/or (6) engaging
24 in misleading, false, unfair and/or deceptive acts or practices by selling and/or facilitating the
25 sale of test strips at a grossly inflated and/or fraudulently obtained price point.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 132 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 141 of 274
1 501. Defendants owed and continue to owe Plaintiffs and the Connecticut members of
2 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
3 the true nature of the pricing of the test strip products described herein.
4 502. Defendants knew or should have known that their conduct was in violation of the
5 Connecticut UTPA.
6 503. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the Connecticut members of the Classes, and
10 continued to engage in unfair and deceptive practices in violation of the Connecticut UTPA.
12 misrepresentations were material to Plaintiffs and the Connecticut members of the Classes, and
13 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 505. Plaintiffs and the Connecticut members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products, as set forth above.
18 Connecticut members of the Classes to overpay for the test strip products. Because Defendants
19 did not reveal the true nature of the Test Strip Pricing Scheme as described herein until this
20 lawsuit was filed, the statute of limitation for filing claims against Defendants under the
21 Connecticut UTPA did not begin to accrue until the filing of this lawsuit. Defendants either
23 506. Plaintiffs and the Connecticut members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 133 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 142 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
5 engaged in conduct amounting to a particularly aggravated, deliberate disregard of the rights and
6 safety of others.
7 509. Plaintiffs and the Connecticut members of the Classes are entitled to recover their
8 actual damages, punitive damages, and attorneys fees pursuant to Conn. Gen. Stat. 42-110g.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 134 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 143 of 274
1 misleading statements regarding the true cost of the price of test strips or causing reasonable
2 inferences about the cost that had the tendency to mislead consumers, including but not limited
3 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
4 concerning the role that Defendants played in setting the price paid for test strips, including but
5 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
6 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
7 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
8 for test strips; (4) making material misrepresentations regarding or failing to disclose the
9 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
10 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
11 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
13 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
14 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
15 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
17 515. Defendants owed and continue to owe Plaintiffs and the Delaware members of the
18 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
19 true nature of the pricing of the test strip products described herein.
20 516. Defendants knew or should have known that their conduct was in violation of the
21 Delaware CFA.
22 517. Despite knowing the true nature of their products and practices for years,
24 regarding the quality and characteristics of the test strip products described herein, with the
25 intent to mislead regulators, Plaintiffs and the Delaware members of the Classes, and continued
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 135 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 144 of 274
2 misrepresentations were material to Plaintiffs and the Delaware members of the Classes, and
3 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
5 519. Plaintiffs and the Delaware members of the Classes relied upon Defendants
6 material misrepresentations and omissions regarding the test strip products, as set forth above.
7 These material misrepresentations by Defendants proximately caused Plaintiff and the Delaware
8 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
9 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
10 the statute of limitation for filing claims against Defendants under the Delaware CFA did not
11 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
13 520. Plaintiffs and the Delaware members of the Classes suffered injury-in-fact,
14 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
16 increased and unfair prices paid for the test strip products described herein.
18 general public, who in many cases are unable to afford or gain access to test strip products. As
19 such, Defendants unlawful acts and practices complained of herein affect the public interest.
20 522. Plaintiffs and the Delaware members of the Classes seek damages under the
21 Delaware CFA for injury resulting from the direct and natural consequences of Defendants
22 unlawful conduct. See, e.g., Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1077 (Del. 1983).
23 Plaintiffs and the Delaware members of the Classes also seek an order enjoining Defendants
24 unfair, unlawful, and/or deceptive practices, declaratory relief, attorneys fees, and any other just
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 136 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 145 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 137 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 146 of 274
1 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
2 and/or charged by the Manufacturer Defendants for test strips; (4) making material
4 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
5 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
6 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
8 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
9 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
10 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
11 point.
12 529. Defendants owed and continue to owe Plaintiffs and the Florida members of the
13 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
14 true nature of the pricing of the test strip products described herein.
15 530. Defendants knew or should have known that their conduct was in violation of the
16 FUTPA.
17 531. Despite knowing the true nature of their products and practices for years,
19 regarding the quality and characteristics of the test strip products described herein, with the
20 intent to mislead regulators, Plaintiffs and the Florida members of the Classes, and continued to
23 misrepresentations were material to Plaintiffs and the Florida members of the Classes, and were
24 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 138 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 147 of 274
1 533. Plaintiffs and the Florida members of the Classes relied upon Defendants
2 material misrepresentations and omissions regarding the test strip products, as set forth above.
3 These material misrepresentations by Defendants proximately caused Plaintiffs and the Florida
4 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
5 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
6 the statute of limitation for filing claims against Defendants under the FUTPA did not begin to
7 accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
9 534. Plaintiffs and the Florida members of the Classes suffered injury-in-fact,
10 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
12 increased and unfair prices paid for the test strip products described herein.
14 general public, who in many cases are unable to afford or gain access to test strip products. As
15 such, Defendants unlawful acts and practices complained of herein affect the public interest.
16 536. Plaintiffs and the Florida members of the Classes are entitled to recover their
17 actual damages under Fla. Stat. 501.211(2) and attorneys fees under Fla. Stat. 501.2105(1).
18 537. Plaintiffs also seek an order enjoining Defendants unfair, unlawful, and/or
19 deceptive practices, declaratory relief, attorneys fees, and any other just and proper relief
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 139 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 148 of 274
1 539. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
3 residents of Georgia at any relevant time (the Georgia members of Classes) against all
5 540. The Georgia Fair Business Practices Act (Georgia FBPA) declares [u]nfair or
6 deceptive acts or practices in the conduct of consumer transactions and consumer acts or
7 practices in trade or commerce to be unlawful, Ga. Code. Ann. 10-1-393(a), including but not
11 another; (5) Representing that goods or services have sponsorship, approval, characteristics,
12 ingredients, uses, benefits, or quantities that they do not have, (7) Representing that goods or
13 services are of a particular standard, quality, or grade if they are of another, (9) Advertising
14 goods or services with intent not to sell them as advertised, and (11) Making false or
15 misleading statements concerning the reasons for, existence of, or amounts of price reductions.
16 541. As detailed above, Defendants engaged in unfair and deceptive acts in violation of
17 the above-noted provisions of the Georgia FBPA by, at a minimum: (1) making misleading
18 statements regarding the true cost of the price of test strips or causing reasonable inferences
19 about the cost that had the tendency to mislead consumers, including but not limited to
20 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
21 concerning the role that Defendants played in setting the price paid for test strips, including but
22 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
23 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
24 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
25 for test strips; (4) making material misrepresentations regarding or failing to disclose the
26 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 140 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 149 of 274
1 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
2 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
4 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
5 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
6 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
8 542. Defendants owed and continue to owe Plaintiffs and the Georgia members of the
9 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
10 true nature of the pricing of the Test strip products described herein.
11 543. Defendants knew or should have known that their conduct was in violation of the
12 Georgia FBPA.
13 544. Despite knowing the true nature of their products and practices for years,
15 regarding the quality and characteristics of the Test strip products described herein, with the
16 intent to mislead regulators, Plaintiffs and the Georgia members of the Classes, and continued to
19 misrepresentations were material to Plaintiffs and the Georgia members of the Classes, and were
20 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
22 546. Plaintiffs and the Georgia members of the Classes relied upon Defendants
23 material misrepresentations and omissions regarding the test strip products, as set forth above.
24 These material misrepresentations by Defendants proximately caused Plaintiffs and the Georgia
25 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
26 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 141 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 150 of 274
1 the statute of limitation for filing claims against Defendants under the Georgia FBPA did not
2 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
4 547. Plaintiffs and the Georgia members of the Classes suffered injury-in-fact,
5 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
7 increased and unfair prices paid for the test strip products described herein.
9 general public, who in many cases are unable to afford or gain access to test strip products. As
10 such, Defendants unlawful acts and practices complained of herein affect the public interest.
11 549. Plaintiffs and the Georgia members of the Classes are entitled to recover damages
12 and exemplary damages (for intentional violations) per Ga. Code. Ann. 10-1-399(a).
13 550. Plaintiffs also seek an order enjoining Defendants unfair, unlawful, and/or
14 deceptive practices, attorneys fees, and any other just and proper relief available under the
16 551. On or about the date of this filing, certain Plaintiffs sent a letter complying with
17 Ga. Code. Ann. 10-1-399(b). If Defendants fail to remedy their unlawful conduct within the
18 requisite time period, Plaintiff seeks all damages and relief to which Plaintiffs and the Georgia
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 142 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 151 of 274
1 residents of Georgia at any relevant time (the Georgia members of Classes) against all
3 554. Defendants, Plaintiffs, and the Georgia members of the Classes are persons
4 within the meaning of Georgia Uniform Deceptive Trade Practices Act (Georgia UDTPA), Ga.
6 555. The Georgia UDTPA prohibits deceptive trade practices, which include (2)
11 ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship,
12 approval, status, affiliation, or connection that he does not have; (11) Mak[ing] false or
13 misleading statements of fact concerning the reasons for, existence of, or amounts of price
14 reductions; [and] (12) Engag[ing] in any other conduct which similarly creates a likelihood of
17 the above-noted provisions of the Georgia UDTPA by, at a minimum: (1) making misleading
18 statements regarding the true cost of the price of test strips or causing reasonable inferences
19 about the cost that had the tendency to mislead consumers, including but not limited to
20 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
21 concerning the role that Defendants played in setting the price paid for test strips, including but
22 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
23 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
24 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
25 for test strips; (4) making material misrepresentations regarding or failing to disclose the
26 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 143 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 152 of 274
1 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
2 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
4 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
5 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
6 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
8 557. Defendants owed and continue to owe Plaintiffs, and the Georgia members of the
9 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
10 true nature of the pricing of the test strip products described herein.
11 558. Defendants knew or should have known that their conduct was in violation of the
12 Georgia UDTPA.
13 559. Despite knowing the true nature of their products and practices for years,
15 regarding the quality and characteristics of the test strip products described herein, with the
16 intent to mislead regulators, Plaintiffs, and the Georgia members of the Classes, and continued to
19 misrepresentations were material to Plaintiffs and the Georgia members of the Classes, and were
20 likely to and/or did, in fact, deceive regulators and reasonable consumers, including, Plaintiffs,
22 561. Plaintiffs and the Georgia members of the Classes relied upon Defendants
23 material misrepresentations and omissions regarding the test strip products, as set forth above.
24 These material misrepresentations by Defendants proximately caused Plaintiffs and the Georgia
25 members of the Classes to overpay for the test strip products described herein. Because
26 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 144 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 153 of 274
1 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
2 Georgia UDTPA did not begin to accrue until the filing of this lawsuit. Defendants either
4 562. Plaintiffs and the Georgia members of the Classes suffered injury-in-fact,
5 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
7 increased and unfair prices paid for the test strip products described herein.
9 general public, who in many cases are unable to afford or gain access to test strip products. As
10 such, Defendants unlawful acts and practices complained of herein affect the public interest.
11 564. Plaintiffs seek an order enjoining Defendants unfair, unlawful, and/or deceptive
12 practices, attorneys fees, and any other just and proper relief available under the Georgia
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 145 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 154 of 274
1 569. Defendants acts or practices as set forth above occurred in the conduct of trade or
2 commerce.
3 570. Haw. Rev. Stat. 480-1 et seq. (the HUPUCA), prohibits the use of any
4 [u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any
5 trade or commerce.
6 571. As detailed above, Defendants engaged in unfair and deceptive acts in violation of
7 the HUPUCA by, at a minimum: (1) making misleading statements regarding the true cost of the
8 price of test strips or causing reasonable inferences about the cost that had the tendency to
9 mislead consumers, including but not limited to publishing, setting, or distributing the list price
10 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
11 the price paid for test strips, including but not limited to marketing material averring that the
12 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
13 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
14 and/or charged by the Manufacturer Defendants for test strips; (4) making material
16 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
17 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
18 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
20 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
21 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
22 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
23 point.
24 572. Defendants owed and continue to owe Plaintiffs and the Hawaii members of the
25 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
26 true nature of the pricing of the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 146 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 155 of 274
1 573. Defendants knew or should have known that their conduct was in violation of the
2 HUPUCA.
3 574. Despite knowing the true nature of their products and practices for years,
5 regarding the quality and characteristics of the test strip products described herein, with the
6 intent to mislead regulators, Plaintiffs and the Hawaii members of the Classes, and continued to
9 misrepresentations were material to Plaintiffs and the Hawaii members of the Classes, and were
10 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
12 576. Plaintiffs and the Hawaii members of the Classes relied upon Defendants
13 material misrepresentations and omissions regarding the test strip products, as set forth above.
14 These material misrepresentations by Defendants proximately caused Plaintiffs and the Hawaii
15 members of the Classes to overpay for the test strip products described herein. Because
16 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
17 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
18 HUPUCA did not begin to accrue until the filing of this lawsuit. Defendants either concealed or
20 577. Plaintiffs and the Hawaii members of the Classes suffered injury-in-fact,
21 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
23 increased and unfair prices paid for the test strip products described herein.
25 general public, who in many cases are unable to afford or gain access to test strip products. As
26 such, Defendants unlawful acts and practices complained of herein affect the public interest.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 147 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 156 of 274
1 579. Pursuant to Haw. Rev. Stat. 480-13, Plaintiffs and the Hawaii members of the
2 Classes seek monetary relief against Defendants measured as the greater of (a) $1,000 and (b)
4 580. Under Haw. Rev. Stat. 480-13.5, Plaintiffs seek an additional award against
5 Defendants of up to $10,000 for each violation directed at a Hawaiian elder. Defendants knew or
6 should have known that its conduct was directed to one or more Class members who are elders.
7 Defendants conduct caused one or more of these elders to suffer a substantial loss of property
8 set aside for retirement or for personal or family care and maintenance, or assets essential to the
9 health or welfare of the elder. One or more Hawaii members of the Classes who are elders are
10 substantially more vulnerable to Defendants conduct because of age, poor health or infirmity,
11 impaired understanding, restricted mobility, or disability, and each of them suffered substantial
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 148 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 157 of 274
1 585. The Idaho CPA prohibits unfair methods of competition and unfair or deceptive
2 acts or practices in the conduct of any trade or commerce, which include (2) Causing
6 that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or
7 quantities that they do not have or that a person has a sponsorship, approval, status, affiliation,
8 connection, qualifications or license that he does not have; (11) Making false or misleading
9 statements of fact concerning the reasons for, existence of, or amounts of price reductions; and
10 (17) Engaging in any act or practice which is otherwise misleading, false, or deceptive to the
12 586. As detailed above, Defendants engaged in unfair and deceptive acts in violation of
13 the above-noted provisions of the Idaho CPA by, at a minimum: (1) making misleading
14 statements regarding the true cost of the price of test strips or causing reasonable inferences
15 about the cost that had the tendency to mislead consumers, including but not limited to
16 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
17 concerning the role that Defendants played in setting the price paid for test strips, including but
18 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
19 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
20 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
21 for test strips; (4) making material misrepresentations regarding or failing to disclose the
22 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
23 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
24 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
26 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 149 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 158 of 274
1 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
2 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
4 587. Defendants owed and continue to owe Plaintiffs and the Idaho members of the
5 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
6 true nature of the pricing of the test strip products described herein.
7 588. Defendants knew or should have known that their conduct was in violation of the
8 Idaho CPA.
9 589. Despite knowing the true nature of their products and practices for years,
11 regarding the quality and characteristics of the test strip products described herein, with the
12 intent to mislead regulators, Plaintiffs and the Idaho members of the Classes, and continued to
15 misrepresentations were material to Plaintiffs and the Idaho members of the Classes, and were
16 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
18 591. Plaintiffs and the Idaho members of the Classes relied upon Defendants material
19 misrepresentations and omissions regarding the test strip products, as set forth above. These
20 material misrepresentations by Defendants proximately caused Plaintiffs and the Idaho members
21 of the Classes to overpay for the test strip products described herein. Because Defendants did not
22 reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was
23 filed, the statute of limitation for filing claims against Defendants under the Idaho CPA did not
24 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 150 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 159 of 274
1 592. Plaintiffs and the Idaho members of the Classes suffered injury-in-fact,
2 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
4 increased and unfair prices paid for the test strip products described herein.
6 general public, who in many cases are unable to afford or gain access to test strip products. As
7 such, Defendants unlawful acts and practices complained of herein affect the public interest.
8 594. Pursuant to Idaho Code 48-608, Plaintiffs and the Idaho members of the Classes
9 seek monetary relief against Defendants measured as the greater of (a) actual damages in an
10 amount to be determined at trial and (b) statutory damages in the amount of $1,000 for each
12 595. Plaintiffs and the Idaho members of the Classes also seek an order enjoining
13 Defendants unfair, unlawful, and/or deceptive practices, attorneys fees, and any other just and
15 596. Plaintiffs and the Idaho members of the Classes also seek punitive damages
17 reasonable standards.
22 597. Plaintiffs incorporate by reference each preceding paragraph as though fully set
23 forth herein.
24 598. Plaintiffs bring this action on behalf of themselves and all members of the Non-
25 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 151 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 160 of 274
1 residents of Illinois at any relevant time (the Illinois members of the Classes) against all
3 599. Defendants are person[s] as that term is defined in 815 ILCS 505/1(c).
4 600. Plaintiffs and the Illinois members of the Classes are consumers as that term is
6 601. The Illinois Consumer Fraud (ICFDPA), 815 ILCS 505/1 et seq., prohibits the
7 use of [u]nfair methods of competition and unfair or deceptive acts or practices, including but
8 not limited to the use or employment of any deception, fraud, false pretense, false promise,
9 misrepresentation or the concealment, suppression or omission of any material fact, with intent
10 that others rely upon the concealment, suppression or omission of such material fact[.]
11 602. In addition, the Illinois Deceptive Business Practices Act (IUDTPA), 815 ILCS
12 510/2 et seq., prohibits the use of various deceptive trade practices, including: (2) caus[ing] a
17 ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship,
18 approval, status, affiliation, or connection that he or she does not have; (11) mak[ing] false or
19 misleading statements of fact concerning the reasons for, existence of, or amounts of price
20 reductions; (12) engag[ing] in any other conduct which similarly creates a likelihood of
21 confusion or misunderstanding.
22 603. As detailed above, Defendants engaged in unfair and deceptive acts in violation of
23 the ICFDPA and the IUDTPA by, at a minimum: (1) making misleading statements regarding
24 the true cost of the price of test strips or causing reasonable inferences about the cost that had the
25 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
26 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 152 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 161 of 274
1 in setting the price paid for test strips, including but not limited to marketing material averring
2 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
3 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
4 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
6 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
7 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
8 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
10 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
11 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
12 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
13 point.
14 604. Defendants owed and continue to owe Plaintiffs and the Illinois members of the
15 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
16 true nature of the pricing of the test strip products described herein.
17 605. Defendants knew or should have known that their conduct was in violation of the
19 606. Despite knowing the true nature of their products and practices for years,
21 regarding the quality and characteristics of the test strip products described herein, with the
22 intent to mislead regulators, Plaintiffs and the Illinois members of the Classes, and continued to
23 engage in unfair and deceptive practices in violation of the ICFDPA and the IUDTPA.
25 misrepresentations were material to Plaintiffs and the Illinois members of the Classes, and were
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 153 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 162 of 274
1 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
3 608. Plaintiffs and the Illinois members of the Classes relied upon Defendants
4 material misrepresentations and omissions regarding the test strip products, as set forth above.
5 These material misrepresentations by Defendants proximately caused Plaintiffs and the Illinois
6 members of the Classes to overpay for the test strip products described herein. Because
7 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
8 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
9 ICFDPA and the IUDTPA did not begin to accrue until the filing of this lawsuit. Defendants
11 609. Plaintiffs and the Illinois members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest.
18 611. Pursuant to 815 ILCS 505/10a(a), Plaintiff and the Illinois members of the
19 Classes seek monetary relief against Defendants in the amount of their actual damages, as well as
20 punitive damages because Defendants acted with fraud and/or malice and/or was grossly
21 negligent.
22 612. Plaintiffs also seek an order enjoining Defendants unfair and/or deceptive acts or
23 practices, punitive damages, and attorneys fees, and any other just and proper relief available
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 154 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 163 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 155 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 164 of 274
1 writing that such representation is true if such other supplier shall know or have reason to know
4 Indiana DCSA by, at a minimum: (1) making misleading statements regarding the true cost of
5 the price of test strips or causing reasonable inferences about the cost that had the tendency to
6 mislead consumers, including but not limited to publishing, setting, or distributing the list price
7 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
8 the price paid for test strips, including but not limited to marketing material averring that the
9 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
10 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
11 and/or charged by the Manufacturer Defendants for test strips; (4) making material
13 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
14 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
15 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
17 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
18 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
19 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
20 point.
21 619. Defendants owed and continue to owe Plaintiffs and the Indiana members of the
22 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
23 true nature of the pricing of the test strip products described herein.
24 620. Defendants knew or should have known that their conduct was in violation of the
25 Indiana DCSA.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 156 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 165 of 274
1 621. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the Indiana members of the Classes, and continued to
7 misrepresentations were material to Plaintiffs and the Indiana members of the Classes, and were
8 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
10 623. Plaintiffs and the Indiana members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiffs and the Indiana
13 members of the Classes to overpay for the test strip products described herein. Because
14 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
15 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
16 Indiana DCSA did not begin to accrue until the filing of this lawsuit. Defendants either
18 624. Plaintiffs and the Indiana members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
23 general public, who in many cases are unable to afford or gain access to test strip products. As
24 such, Defendants unlawful acts and practices complained of herein affect the public interest.
25 626. Pursuant to Ind. Code 24-5-0.5-4, Plaintiffs and the Indiana members of the
26 Classes seek monetary relief against Defendants measured as the greater of (a) actual damages in
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 157 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 166 of 274
1 an amount to be determined at trial and (b) statutory damages in the amount of $500 for each
2 Plaintiff and each Indiana member of the Classes, including treble damages up to $1,000 for
4 627. Plaintiff also seeks punitive damages based on the outrageousness and
6 628. On or about the date of this filing, certain Plaintiffs sent notice letters to
7 Defendants pursuant to Ind. Code 24-5-0.5-2 and 24-5-0.5-5. If Defendants fail to remedy
8 their unlawful conduct within the requisite time period, Plaintiffs seek all damages and relief to
9 which Plaintiffs and the Indiana members of the Classes are entitled.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 158 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 167 of 274
1 632. The Iowa members of the Classes are consumers under the Iowa CFA. Iowa
2 Code 714H.2.
3 633. For purposes of the Iowa CFA, each Defendant is a person. Iowa Code
4 714H.2, 714.16.
5 634. Defendants violated the Iowa CFA, at a minimum by: (1) making misleading
6 statements regarding the true cost of the price of test strips or causing reasonable inferences
7 about the cost that had the tendency to mislead consumers, including but not limited to
8 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
9 concerning the role that Defendants played in setting the price paid for test strips, including but
10 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
11 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
12 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
13 for test strips; (4) making material misrepresentations regarding or failing to disclose the
14 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
15 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
16 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
18 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
19 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
20 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
22 635. These violations harmed the Iowa members of the Classes and likely will continue
24 636. Under Iowa Code 714H.5, Plaintiffs seek an injunction to protect the public
25 from further violations of the Iowa CFA by Defendants. Furthermore, Plaintiffs request actual
26 damages, costs of the action, and reasonable attorneys fees. Iowa Code 714H.5.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 159 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 168 of 274
1 637. Because Defendants conduct in violation of the Iowa CFA constitutes willful
2 and wanton disregard for the rights or safety of another, in addition to an award of actual
3 damages, Plaintiffs seek statutory damages in the amount of three times actual damages. Iowa
4 Code 714H.5.
5 638. Plaintiffs further request any other equitable relief as [the Court] deems
6 necessary to protect the public from further violations. Iowa Code 714H.5.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 160 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 169 of 274
1 ingredients, uses, benefits or quantities that they do not have; and (D) property or services are
2 of particular standard, quality, grade, style or model, if they are of another which differs
3 materially from the representation; (2) the willful use, in any oral or written representation, of
4 exaggeration, falsehood, innuendo or ambiguity as to a material fact; (3) the willful failure to
5 state a material fact, or the willful concealment, suppression or omission of a material fact, and
6 (7) making false or misleading representations, knowingly or with reason to know, of fact
7 concerning the reason for, existence of or amounts of price reductions, or the price in comparison
8 to prices of competitors or one's own price at a past or future time. The Kansas CPA also
9 provides that [n]o supplier shall engage in any unconscionable act or practice in connection
11 645. As detailed above, Defendants engaged in misleading, false and deceptive acts in
12 violation of the above-noted provisions of the Kansas CPA by, at a minimum: (1) making
13 misleading statements regarding the true cost of the price of test strips or causing reasonable
14 inferences about the cost that had the tendency to mislead consumers, including but not limited
15 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
16 concerning the role that Defendants played in setting the price paid for test strips, including but
17 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
18 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
19 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
20 for test strips; (4) making material misrepresentations regarding or failing to disclose the
21 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
22 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
23 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
25 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
26 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 161 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 170 of 274
1 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
3 646. Defendants owed and continue to owe Plaintiffs, and the Kansas members of the
4 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
5 true nature of the pricing of the test strip products described herein.
6 647. Defendants knew or should have known that their conduct was in violation of the
7 Kansas CPA.
8 648. Despite knowing the true nature of their products and practices for years,
10 regarding the quality and characteristics of the test strip products described herein, with the
11 intent to mislead regulators, Plaintiffs, and the Kansas members of the Classes, and continued to
14 misrepresentations were material to Plaintiffs, and the Kansas members of the Classes, and were
15 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs,
17 650. Plaintiffs, and the Kansas members of the Classes relied upon Defendants
18 material misrepresentations and omissions regarding the test strip products, as set forth above.
19 These material misrepresentations by Defendants proximately caused Plaintiffs and the Kansas
20 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
21 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
22 the statute of limitation for filing claims against Defendants under the Kansas CPA did not begin
23 to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
25 651. Plaintiffs, and the Kansas members of the Classes suffered injury-in-fact,
26 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 162 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 171 of 274
2 increased and unfair prices paid for the test strip products described herein.
4 general public, who in many cases are unable to afford or gain access to test strip products. As
5 such, Defendants unlawful acts and practices complained of herein affect the public interest.
6 653. Pursuant to Kan. Stat. Ann. 50-634, Plaintiffs and the Kansas members in the
7 Classes seek monetary relief against Defendants measured as the greater of (a) actual damages in
8 an amount to be determined at trial and (b) statutory damages in the amount of $10,000 for each
10 654. Plaintiffs also seek an order enjoining Defendants unfair, unlawful, and/or
11 deceptive practices, declaratory relief, attorneys fees, and any other just and proper relief
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 163 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 172 of 274
1 659. The Kentucky Consumer Protection Act (the Kentucky CPA) prohibits
2 [u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or
4 660. As detailed above, Defendants engaged in unfair, misleading, false and deceptive
5 acts in violation of the above-noted provisions of the Kentucky CPA by, at a minimum: (1)
6 making misleading statements regarding the true cost of the price of test strips or causing
7 reasonable inferences about the cost that had the tendency to mislead consumers, including but
8 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
9 advertising concerning the role that Defendants played in setting the price paid for test strips,
10 including but not limited to marketing material averring that the PBM Defendants make efforts
11 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
12 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
13 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
14 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
15 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
16 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
17 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
18 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
19 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
20 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
22 661. Defendants owed and continue to owe Plaintiffs and the Kentucky members of the
23 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
24 true nature of the pricing of the test strip products described herein.
25 662. Defendants knew or should have known that their conduct was in violation of the
26 Kentucky CPA.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 164 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 173 of 274
1 663. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the Kentucky members of the Classes, and continued
7 misrepresentations were material to Plaintiffs and the Kentucky members of the Classes, and
8 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
10 665. Plaintiffs and the Kentucky members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiffs and the Kentucky
13 members of the Classes to overpay for the test strip products described herein. Because
14 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
15 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
16 Kentucky CPA did not begin to accrue until the filing of this lawsuit. Defendants either
18 666. Plaintiffs and the Kentucky members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
23 general public, who in many cases are unable to afford or gain access to test strip products. As
24 such, Defendants unlawful acts and practices complained of herein affect the public interest
25 668. Pursuant to Ky. Rev. Stat. Ann. 367.220, Plaintiffs and the Kentucky members
26 of the Classes seek to recover actual damages in an amount to be determined at trial; an order
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 165 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 174 of 274
1 enjoining Defendants unfair, unlawful, and/or deceptive practices; declaratory relief; attorneys
2 fees; and any other just and proper relief available under Ky. Rev. Stat. Ann. 367.220.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 166 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 175 of 274
1 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
2 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
3 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
5 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
6 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
7 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
9 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
10 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
11 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
12 point.
13 676. Defendants owed and continue to owe Plaintiffs and the Louisiana members of
14 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
15 the true nature of the pricing of the test strip products described herein.
16 677. Defendants knew or should have known that their conduct was in violation of the
17 Louisiana CPL.
18 678. Despite knowing the true nature of their products and practices for years,
20 regarding the quality and characteristics of the test strip products described herein, with the
21 intent to mislead regulators, Plaintiffs and the Louisiana members of the Classes, and continued
24 misrepresentations were material to Plaintiffs and the Louisiana members of the Classes, and
25 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 167 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 176 of 274
1 680. Plaintiffs and the Louisiana members of the Classes relied upon Defendants
2 material misrepresentations and omissions regarding the test strip products, as set forth above.
4 Louisiana members of the Classes to overpay for the test strip product described herein. Because
5 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
6 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
7 Louisiana CPL did not begin to accrue until the filing of this lawsuit. Defendants either
9 681. Plaintiffs and the Louisiana members of the Classes suffered injury-in-fact,
10 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
12 increased and unfair prices paid for the test strip products described herein.
14 general public, who in many cases are unable to afford or gain access to test strip products. As
15 such, Defendants unlawful acts and practices complained of herein affect the public interest.
16 683. Pursuant to La. Rev. Stat. 51:1409, Plaintiffs and the Louisiana members of the
17 Classes seek to recover actual damages in an amount to be determined at trial; treble damages for
18 Defendants knowing violations of the Louisiana CPL; an order enjoining Defendants unfair,
19 unlawful, and/or deceptive practices; declaratory relief; attorneys fees; and any other just and
25 684. Plaintiffs incorporate by reference each preceding paragraph as though fully set
26 forth herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 168 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 177 of 274
1 685. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
3 residents of Maine at any relevant time (the Maine members of the Classes) against all
5 686. Defendants, Plaintiffs, and the Maine members of the Classes are persons
7 687. Defendants are engaged in trade or commerce within the meaning of Me.
9 688. The Maine Unfair Trade Practices Act (the MUTPA) makes unlawful [u]nfair
10 methods of competition and unfair or deceptive acts or practices in the conduct of any trade or
12 689. In addition, the Maine Uniform Deceptive Trade Practices Act (the MUDTPA),
13 5 M.R.S.A. 1211 et seq., prohibits the use of various deceptive trade practices, including:
18 uses, benefits or quantities that they do not have, or that a person has a sponsorship, approval,
19 status, affiliation or connection that he does not have; Mak[ing] false or misleading statements
20 of fact concerning the reasons for, existence of or amounts of, price reductions; and
22 misunderstanding.
24 MUTPA and the MUDTPA by, at a minimum: (1) making misleading statements regarding the
25 true cost of the price of test strips or causing reasonable inferences about the cost that had the
26 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 169 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 178 of 274
1 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
2 in setting the price paid for test strips, including but not limited to marketing material averring
3 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
4 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
5 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
7 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
8 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
9 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
11 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
12 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
13 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
14 point.
15 691. Defendants owed and continue to owe Plaintiffs and the Maine members of the
16 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
17 true nature of the pricing of the test strip products described herein.
18 692. Defendants knew or should have known that their conduct was in violation of the
20 693. Despite knowing the true nature of their products and practices for years,
22 regarding the quality and characteristics of the test strip products described herein, with the
23 intent to mislead regulators, Plaintiffs and the Maine members of the Classes, and continued to
24 engage in unfair and deceptive practices in violation of the MUTPA and the MUDTPA.
26 misrepresentations were material to Plaintiffs and the Maine members of the Classes, and were
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 170 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 179 of 274
1 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
3 695. Plaintiffs and the Maine members of the Classes relied upon Defendants material
4 misrepresentations and omissions regarding the test strip products, as set forth above. These
5 material misrepresentations by Defendants proximately caused Plaintiffs and the Maine members
6 of the Classes to overpay for the test strip products. Because Defendants did not reveal the true
7 nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed, the
8 statute of limitation for filing claims against Defendants under the MUTPA and the MUDTPA
9 did not begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to
11 696. Plaintiffs and the Maine members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest.
18 698. Pursuant the MUTPA and the MUDTPA, Plaintiffs and the Maine members of the
19 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, damages,
20 punitive damages, and attorneys fees, costs, and any other just and proper relief available under
22 699. On or about the date of this filing, certain Plaintiffs sent a letter complying with
23 Me. Rev. Stat. Ann. Tit. 5, 213(1-A). If Defendants fail to remedy their unlawful conduct
24 within the requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 171 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 180 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 172 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 181 of 274
1 consumer rely on the same in connection with [t]he promotion or sale of any consumer goods,
3 705. In the course of their business, Defendants engaged in unfair and deceptive acts in
4 violation of the Maryland CPA by, at a minimum: (1) making misleading statements regarding
5 the true cost of the price of test strips or causing reasonable inferences about the cost that had the
6 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
7 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
8 in setting the price paid for test strips, including but not limited to marketing material averring
9 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
10 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
11 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
13 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
14 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
15 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
17 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
18 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
19 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
20 point.
21 706. Defendants owed and continue to owe Plaintiffs and the Maryland members of the
22 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
23 true nature of the pricing of the test strip products described herein.
24 707. Defendants knew or should have known that their conduct was in violation of the
25 Maryland CPA.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 173 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 182 of 274
1 708. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the Maryland members of the Classes, and continued
7 misrepresentations were material to Plaintiffs and the Maryland members of the Classes, and
8 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
10 710. Plaintiffs and the Maryland members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiff and the Maryland
13 members of the Classes to overpay for the test strip products described herein. Because
14 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
15 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
16 Maryland CPA did not begin to accrue until the filing of this lawsuit. Defendants either
18 711. Plaintiffs and the Maryland members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
23 general public, who in many cases are unable to afford or gain access to test strip products. As
24 such, Defendants unlawful acts and practices complained of herein affect the public interest.
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 174 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 183 of 274
1 713. Pursuant to Md. Code Com. Law 13-408, Plaintiffs and the Maryland members
2 of the Classes seek actual damages, attorneys fees, and any other just and proper relief available
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 175 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 184 of 274
1 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
2 for test strips; (4) making material misrepresentations regarding or failing to disclose the
3 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
4 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
5 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
7 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
8 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
9 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
11 720. As alleged throughout this Complaint, Defendants also engaged in unfair and
12 unscrupulous practices by raising the price of life-saving medication without justification and
14 721. Defendants conduct offends public policy and is immoral, unethical, oppressive,
16 722. Additionally, Defendants conduct was deceptive because it caused Plaintiffs and
17 the Massachusetts members of the Classes to act differently from the way they would have
18 otherwise acted.
19 723. Defendants owed and continue to owe Plaintiffs, and the Massachusetts members
20 of the Classes a duty to refrain from the above-described unfair and deceptive practices and
21 disclose the true nature of the pricing of the test strip products described herein.
22 724. Defendants knew or should have known that their conduct was in violation of the
23 Massachusetts CPA.
24 725. Despite knowing the true nature of their products and practices for years,
26 regarding the quality and characteristics of the test strip products described herein, with the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 176 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 185 of 274
1 intent to mislead regulators, Plaintiffs, and the Massachusetts members of the Classes, and
2 continued to engage in unfair and deceptive practices in violation of the Massachusetts CPA.
4 misrepresentations were material to Plaintiffs, and the Massachusetts members of the Classes,
5 and were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
7 727. Plaintiffs, and the Massachusetts members of the Classes relied upon Defendants
8 material misrepresentations and omissions regarding the test strip products, as set forth above.
10 Massachusetts members of the Classes to overpay for the test strip products. Because Defendants
11 did not reveal the true nature of the Test Strip Pricing Scheme as described herein until this
12 lawsuit was filed, the statute of limitation for filing claims against Defendants under the
13 Massachusetts CPA did not begin to accrue until the filing of this lawsuit. Defendants either
15 728. Plaintiffs, and the Massachusetts members of the Classes suffered injury-in-fact,
16 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
18 increased and unfair prices paid for the test strip products described herein.
20 general public, who in many cases are unable to afford or gain access to test strip products. As
21 such, Defendants unlawful acts and practices complained of herein affect the public interest.
22 730. Pursuant to Mass. Gen. Laws ch. 93A, 9, Plaintiffs and the Massachusetts
23 members of the Classes seek monetary relief against Defendants measured as the greater of (a)
24 actual damages in an amount to be determined at trial and (b) statutory damages in the amount of
25 $25 for each Plaintiff and each Massachusetts member of the Classes. Because Defendants
26 conduct was committed willfully and knowingly, Plaintiffs are entitled to recover, for each
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 177 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 186 of 274
1 Massachusetts member of the Classes, up to three times actual damages, but no less than two
3 731. Plaintiffs and the Massachusetts members of the Classes also seek an order
4 enjoining Defendants unfair and/or deceptive acts or practices, punitive damages, and attorneys
5 fees, costs, and any other just and proper relief available under the Massachusetts CPA.
6 732. On or about the date of this filing, certain Plaintiffs sent a letter complying with
7 Mass. Gen. Laws ch. 93A, 9(3). If Defendants fail to remedy their unlawful conduct within the
8 requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 178 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 187 of 274
2 the test strip products at a price that is grossly in excess of competing branded test strip products
3 sold both in the United States and internationally, competing generic test strip products, and even
6 methods, acts, or practices in the conduct of trade or commerce including: (a) Causing a
9 characteristics that they do not have .; (e) Representing that goods or services are of a
10 particular standard if they are of another; (i) Making false or misleading statements of fact
11 concerning the reasons for, existence of, or amounts of price reductions; (s) Failing to reveal a
12 material fact, the omission of which tends to mislead or deceive the consumer, and which fact
13 could not reasonably be known by the consumer; (bb) Making a representation of fact or
14 statement of fact material to the transaction such that a person reasonably believes the
15 represented or suggested state of affairs to be other than it actually is; and (cc) Failing to reveal
16 facts that are material to the transaction in light of representations of fact made in a positive
19 acts in violation of the above-noted provisions of the Michigan CPA by, at a minimum: (1)
20 making misleading statements regarding the true cost of the price of test strips or causing
21 reasonable inferences about the cost that had the tendency to mislead consumers, including but
22 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
23 advertising concerning the role that Defendants played in setting the price paid for test strips,
24 including but not limited to marketing material averring that the PBM Defendants make efforts
25 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
26 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 179 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 188 of 274
1 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
2 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
3 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
4 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
5 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
6 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
7 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
8 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
10 741. Defendants owed and continue to owe Plaintiffs and the Michigan members of the
11 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
12 true nature of the pricing of the test strip products described herein.
13 742. Defendants knew or should have known that their conduct was in violation of the
14 Michigan CPA.
15 743. Despite knowing the true nature of their products and practices for years,
17 regarding the quality and characteristics of the test strip products described herein, with the
18 intent to mislead regulators, Plaintiffs and the Michigan members of the Classes, and continued
21 misrepresentations were material to Plaintiffs the Michigan members of the Classes, and were
22 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
24 745. Plaintiffs and the Michigan members of the Classes relied upon Defendants
25 material misrepresentations and omissions regarding the test strip products, as set forth above.
26 These material misrepresentations by Defendants proximately caused Plaintiffs and the Michigan
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 180 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 189 of 274
1 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
2 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
3 the statute of limitation for filing claims against Defendants under the Michigan CPA did not
4 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
6 746. Plaintiffs and the Michigan members of the Classes suffered injury-in-fact,
7 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
9 increased and unfair prices paid for the test strip products described herein.
11 general public, who in many cases are unable to afford or gain access to test strip products. As
12 such, Defendants unlawful acts and practices complained of herein affect the public interest.
13 748. Plaintiffs and the Michigan members of the Classes seek injunctive relief to
14 enjoin Defendants from continuing their unfair and deceptive acts; monetary relief against
15 Defendants measured as the greater of (a) actual damages in an amount to be determined at trial
16 and (b) statutory damages in the amount of $250 for Plaintiffs and each Michigan member of the
17 Classes; reasonable attorneys fees; and any other just and proper relief available under Mich.
19 749. Plaintiffs and the Michigan members of the Classes also seek punitive damages
20 against Defendants because it carried out despicable conduct with willful and conscious
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 181 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 190 of 274
1 751. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or who have been
3 residents of Minnesota at any relevant time (the Minnesota members of the Classes) against all
5 752. The test strip products described herein constitute merchandise within the
7 753. The Minnesota Prevention of Consumer Fraud Act (Minnesota CFA) prohibits
8 [t]he act, use, or employment by any person of any fraud, false pretense, false promise,
9 misrepresentation, misleading statement or deceptive practice, with the intent that others rely
10 thereon in connection with the sale of any merchandise, whether or not any person has in fact
13 Minnesota CFA by, at a minimum: (1) making misleading statements regarding the true cost of
14 the price of test strips or causing reasonable inferences about the cost that had the tendency to
15 mislead consumers, including but not limited to publishing, setting, or distributing the list price
16 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
17 the price paid for test strips, including but not limited to marketing material averring that the
18 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
19 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
20 and/or charged by the Manufacturer Defendants for test strips; (4) making material
22 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
23 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
24 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
26 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 182 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 191 of 274
1 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
2 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
3 point.
4 755. Defendants owed and continue to owe Plaintiffs and the Minnesota members of
5 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
6 the true nature of the pricing of the test strip products described herein.
7 756. Defendants knew or should have known that their conduct was in violation of the
8 Minnesota CFA.
9 757. Despite knowing the true nature of their products and practices for years,
11 regarding the quality and characteristics of the test strip products described herein, with the
12 intent to mislead regulators, Plaintiffs and the Minnesota members of the Classes, and continued
15 misrepresentations were material to Plaintiffs and the Minnesota members of the Classes, and
16 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
18 759. Plaintiffs and the Minnesota members of the Classes relied upon Defendants
19 material misrepresentations and omissions regarding the test strip products, as set forth above.
20 These material misrepresentations by Defendants proximately caused Plaintiff and the Minnesota
21 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
22 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
23 the statute of limitation for filing claims against Defendants under the Minnesota CFA did not
24 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 183 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 192 of 274
1 760. Plaintiffs and the Minnesota members of the Classes suffered injury-in-fact,
2 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
4 increased and unfair prices paid for the test strip products described herein.
6 general public, who in many cases are unable to afford or gain access to test strip products. As
7 such, Defendants unlawful acts and practices complained of herein affect the public interest.
8 762. Pursuant to Minn. Stat. 8.31(3)(a), Plaintiffs and the Minnesota members of the
9 Classes seek actual damages, attorneys fees, and any other just and proper relief available under
11 763. Plaintiffs and the Minnesota members of the Classes also seek punitive damages
12 under Minn. Stat. 549.20(1)(a) given the clear and convincing evidence that Defendants acts
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 184 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 193 of 274
1 association with, or certification by, another; (5) represents that goods or services have
2 sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not
3 have or that a person has a sponsorship, approval, status, affiliation, or connection that the person
4 does not have; (7) represents that goods or services are of a particular standard, quality, or
5 grade, or that goods are of a particular style or model, if they are of another; (9) advertises
6 goods or services with intent not to sell them as advertised; (11) makes false or misleading
7 statements of fact concerning the reasons for, existence of, or amounts of price reductions; or
8 (13) engages in any other conduct which similarly creates a likelihood of confusion or of
10 767. As detailed above, Defendants engaged in misleading, false and deceptive acts in
11 violation of the above-noted provisions of the Minnesota DTPA by, at a minimum: (1) making
12 misleading statements regarding the true cost of the price of test strips or causing reasonable
13 inferences about the cost that had the tendency to mislead consumers, including but not limited
14 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
15 concerning the role that Defendants played in setting the price paid for test strips, including but
16 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
17 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
18 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
19 for test strips; (4) making material misrepresentations regarding or failing to disclose the
20 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
21 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
22 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
24 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
25 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 185 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 194 of 274
1 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
3 768. Defendants owed and continue to owe Plaintiffs and the Minnesota members of
4 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
5 the true nature of the pricing of the test strip products described herein.
6 769. Defendants knew or should have known that their conduct was in violation of the
7 Minnesota DTPA.
8 770. Despite knowing the true nature of their products and practices for years,
10 regarding the quality and characteristics of the test strip products described herein, with the
11 intent to mislead regulators, Plaintiffs and the Minnesota members of the Classes, and continued
14 misrepresentations were material to Plaintiffs and the Minnesota members of the Classes, and
15 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
17 772. Plaintiffs and the Minnesota members of the Classes relied upon Defendants
18 material misrepresentations and omissions regarding the test strip products, as set forth above.
19 These material misrepresentations by Defendants proximately caused Plaintiff and the Minnesota
20 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
21 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
22 the statute of limitation for filing claims against Defendants under the Minnesota DTPA did not
23 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
25 773. Plaintiffs and the Minnesota members of the Classes suffered injury-in-fact,
26 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 186 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 195 of 274
2 increased and unfair prices paid for the test strip products described herein.
4 general public, who in many cases are unable to afford or gain access to test strip products. As
5 such, Defendants unlawful acts and practices complained of herein affect the public interest.
6 775. Pursuant to Minn. Stat. 8.31(3a) and 325D.45, Plaintiffs and the Minnesota
7 members of the Classes seek actual damages, attorneys fees, and any other just and proper relief
9 776. Plaintiffs and Minnesota Members of the Classes also seek punitive damages
10 under Minn. Stat. 549.20(1)(a) give the clear and convincing evidence that Defendants acts
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 187 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 196 of 274
1 they do not have or that a person has a sponsorship, approval, status, affiliation, or connection
2 that he does not have; (g) Representing that goods or services are of a particular standard,
3 quality, or grade, or that goods are of a particular style or model, if they are of another; (i)
4 Advertising goods or services with intent not to sell them as advertised; and (k)
5 Misrepresentations of fact concerning the reasons for, existence of, or amounts of price
7 780. As detailed above, Defendants engaged in misleading, false and deceptive acts in
8 violation of the above-noted provisions of the Mississippi CPA by, at a minimum: (1) making
9 misleading statements regarding the true cost of the price of test strips or causing reasonable
10 inferences about the cost that had the tendency to mislead consumers, including but not limited
11 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
12 concerning the role that Defendants played in setting the price paid for test strips, including but
13 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
14 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
15 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
16 for test strips; (4) making material misrepresentations regarding or failing to disclose the
17 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
18 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
19 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
21 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
22 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
23 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 188 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 197 of 274
1 781. Defendants owed and continue to owe Plaintiffs and the Mississippi members of
2 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
3 the true nature of the pricing of the test strip products described herein.
4 782. Defendants knew or should have known that their conduct was in violation of the
5 Mississippi CPA.
6 783. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the Mississippi members of the Classes, and continued
12 misrepresentations were material to Plaintiffs and the Mississippi members of the Classes, and
13 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 785. Plaintiffs and the Mississippi members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products, as set forth above.
18 Mississippi members of the Classes to overpay for the test strip products. Because Defendants
19 did not reveal the true nature of the Test Strip Pricing Scheme as described herein until this
20 lawsuit was filed, the statute of limitation for filing claims against Defendants under the
21 Mississippi CPA did not begin to accrue until the filing of this lawsuit. Defendants either
23 786. Plaintiffs and the Mississippi members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 189 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 198 of 274
1 787. On or about the date of this filing, certain Plaintiffs sent letters to Defendants
2 pursuant to Miss. Code 75-24-15(2) seeking to make a reasonable attempt to resolve this claim
3 through informal means. If Defendants fail to respond to Plaintiffs request to mediate within the
4 requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the
6 788. Plaintiffs and the Mississippi members of the Classes seek actual damages in an
7 amount to be determined at trial any other just and proper relief available under the Mississippi
8 CPA.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 190 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 199 of 274
1 794. As detailed above, Defendants engaged in unfair, false, and deceptive practices in
2 violation of the above-noted provisions of the Missouri MPA by, at a minimum: (1) making
3 misleading statements regarding the true cost of the price of test strips or causing reasonable
4 inferences about the cost that had the tendency to mislead consumers, including but not limited
5 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
6 concerning the role that Defendants played in setting the price paid for test strips, including but
7 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
8 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
9 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
10 for test strips; (4) making material misrepresentations regarding or failing to disclose the
11 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
12 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
13 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
15 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
16 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
17 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
20 and/or it presented a risk of substantial injury to consumers. Such acts are unfair practices in
22 796. Defendants owed and continue to owe Plaintiffs and the Missouri members of the
23 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
24 true nature of the pricing of the test strip products described herein.
25 797. Defendants knew or should have known that their conduct was in violation of the
26 Missouri MPA
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 191 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 200 of 274
1 798. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the Missouri members of the Classes, and continued to
7 misrepresentations were material to Plaintiffs and the Missouri members of the Classes, and were
8 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
10 800. Plaintiffs and the Missouri members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiff and the Missouri
13 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
14 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
15 the statute of limitation for filing claims against Defendants under the Missouri MPA did not
16 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
18 801. Plaintiffs and the Missouri members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
22 802. As such Defendants are liable to Plaintiffs and the Missouri members of the
23 Classes for damages in amounts to be proven at trial, including attorneys fees, costs, and
24 punitive damages, as well as injunctive relief enjoining Defendants unfair and deceptive
25 practices, and any other just and proper relief under Mo. Rev. Stat. 407.025.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 192 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 201 of 274
1 for test strips; (4) making material misrepresentations regarding or failing to disclose the
2 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
3 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
4 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
6 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
7 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
8 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
10 810. These violations harmed the Montana members of the Classes and likely will
12 811. Under Mont. Code 30-14-133, Plaintiffs seek an injunction to protect the public
14 812. Furthermore, Plaintiffs request actual damages or $500 per Montana member of
15 the Classes, whichever is greater. Mont. Code 30-14-133. Plaintiffs also seek costs of the
17 813. Plaintiffs and the Montana members of the Classes further request the Court to
18 provide any other equitable relief that it considers necessary or proper. Mont. Code 30-14-
19 133.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 194 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 203 of 274
1 been residents of the State of Nebraska during the relevant period (the Nebraska members of the
2 Classes) against all Defendants (for the purposes of this section, Defendants).
3 816. Nebraskas Unfair Trade Practices and Consumer Protection Act (Nebraska
4 CPA) provides that [u]nfair methods of competition and unfair or deceptive acts or practices in
5 the conduct of any trade or commerce shall be unlawful. Neb. Rev. Stat. 59-1602.
6 817. For purposes of the Nebraska CPA, each Defendant and each Nebraska member
8 818. Defendants activities in regard to test strips constitute trade and commerce
10 819. Defendants violated the Nebraska CPA, at a minimum by: (1) making misleading
11 statements regarding the true cost of the price of test strips or causing reasonable inferences
12 about the cost that had the tendency to mislead consumers, including but not limited to
13 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
14 concerning the role that Defendants played in setting the price paid for test strips, including but
15 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
16 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
17 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
18 for test strips; (4) making material misrepresentations regarding or failing to disclose the
19 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
20 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
21 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
23 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
24 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
25 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 195 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 204 of 274
1 820. The foregoing violations caused harm to Plaintiffs and the Nebraska members of
2 the Classes, and are likely to harm consumers in the future if Defendants practices are not
3 stopped.
4 821. Under Neb. Rev. Stat. 59-1609, Plaintiffs and the Nebraska members of the
5 Classes seek an injunction to protect the public from further violations of the Nebraska CPA by
6 Defendants.
7 822. Furthermore, Plaintiffs and the Nebraska members of the Classes request actual
8 damages together with costs, including reasonable attorneys fees. Neb. Rev. Stat. 59-1609.
9 Plaintiffs further seek the maximum discretionary award permitted under Neb. Rev. Stat. 59-
10 1609, and any other relief pursuant to the Nebraska CPA that the Court finds proper.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 196 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 205 of 274
1 quantities of goods or services for sale or lease or a false representation as to the sponsorship,
3 services for sale or lease are of a particular standard, quality or grade, or that such goods are of a
4 particular style or model, if he or she knows or should know that they are of another standard,
5 quality, grade, style or model; 9. Advertises goods or services with intent not to sell or lease
6 them as advertised; 13. Makes false or misleading statements of fact concerning the price of
7 goods or services for sale or lease, or the reasons for, existence of or amounts of price
9 826. In the course of their business, Defendants engaged in deceptive trade practices in
10 violation of the Nevada DTPA by, at a minimum: (1) making misleading statements regarding
11 the true cost of the price of test strips or causing reasonable inferences about the cost that had the
12 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
13 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
14 in setting the price paid for test strips, including but not limited to marketing material averring
15 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
16 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
17 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
19 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
20 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
21 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
23 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
24 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
25 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
26 point.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 197 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 206 of 274
1 827. Defendants owed and continue to owe Plaintiffs and the Nevada members of the
2 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
3 true nature of the pricing and legality of the test strip products described herein.
4 828. Defendants knew or should have known that their conduct was in violation of the
5 Nevada DTPA.
6 829. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the Nevada members of the Classes, and continued to
12 misrepresentations were material to Plaintiffs and the Nevada members of the Classes, and were
13 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
15 831. Plaintiffs and the Nevada members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products described herein, as
17 set forth above. These material misrepresentations by Defendants proximately caused Plaintiffs
18 and the Nevada members of the Classes to overpay for the Test strip products described herein.
19 Because Defendants did not reveal the true nature of the Test strip products described herein
20 products and their pricing as described herein until this lawsuit was filed, the statute of limitation
21 for filing claims against Defendants under the Nevada DTPA. did not begin to accrue until the
22 filing of this lawsuit. Defendants either concealed or failed to reveal the facts until this filing.
23 832. Plaintiffs and the Nevada members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 198 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 207 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
4 834. Accordingly, Plaintiffs and the Nevada members of the Classes seek their actual
5 damages, punitive damages, an order enjoining Defendants deceptive acts or practices, costs of
6 Court, attorneys fees, and all other appropriate and available remedies under the Nevada
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 199 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 208 of 274
1 by, another; . . . (V) Representing that goods or services have . . . characteristics, . . . uses,
2 benefits, or quantities that they do not have; (VII) Representing that goods or services are of a
3 particular standard, quality, or grade, . . . if they are of another; (IX) Advertising goods or
4 services with intent not to sell them as advertised; (XI) Making false or misleading statements
5 of fact concerning the reasons for, existence of, or amounts of price reductions; and XIV.
8 840. As detailed above, Defendants engaged in unfair and deceptive acts in violation of
9 the New Hampshire CPA by, at a minimum: (1) making misleading statements regarding the true
10 cost of the price of test strips or causing reasonable inferences about the cost that had the
11 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
12 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
13 in setting the price paid for test strips, including but not limited to marketing material averring
14 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
15 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
16 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
18 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
19 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
20 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
22 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
23 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
24 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
25 point.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 200 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 209 of 274
1 841. Defendants owed and continue to owe Plaintiffs and the New Hampshire
2 members of the Classes a duty to refrain from the above-described unfair and deceptive practices
3 and disclose the true nature of the pricing of the test strip products described herein.
4 842. Defendants knew or should have known that their conduct was in violation of the
6 843. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the New Hampshire members of the Classes, and
10 continued to engage in unfair and deceptive practices in violation of the New Hampshire CPA.
12 misrepresentations were material to Plaintiffs and the New Hampshire members of the Classes,
13 and were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 845. Plaintiffs and the New Hampshire members of the Classes relied upon
16 Defendants material misrepresentations and omissions regarding the test strip products, as set
17 forth above. These material misrepresentations by Defendants proximately caused Plaintiffs and
18 the New Hampshire members of the Classes to overpay for the test strip products. Because
19 Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described herein
20 until this lawsuit was filed, the statute of limitation for filing claims against Defendants under the
21 New Hampshire CPA did not begin to accrue until the filing of this lawsuit. Defendants either
23 846. Plaintiffs and the New Hampshire members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 201 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 210 of 274
1 847. Because Defendants willful conduct caused injury to the Plaintiffs and the New
2 Hampshire members of the Classes property through violations of the New Hampshire CPA,
3 Plaintiffs and the New Hampshire members of the Classes seeks recovery of actual damages or
4 $1,000, whichever is greater, treble damages, costs and reasonable attorneys fees, an order
5 enjoining Defendants unfair and/or deceptive acts and practices, and any other just and proper
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 202 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 211 of 274
1 estate, or with the subsequent performance of such person as aforesaid, whether or not any
2 person has in fact been misled, deceived or damaged thereby . . . . N.J. Stat. 56:8-2.
3 854. In the course of their business, Defendants engaged in unfair and deceptive
4 practices in violation of the New Jersey CFA by, at a minimum: (1) making misleading
5 statements regarding the true cost of the price of test strips or causing reasonable inferences
6 about the cost that had the tendency to mislead consumers, including but not limited to
7 publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
8 concerning the role that Defendants played in setting the price paid for test strips, including but
9 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
10 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
11 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
12 for test strips; (4) making material misrepresentations regarding or failing to disclose the
13 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
14 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
15 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
17 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
18 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
19 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
21 855. Defendants owed and continue to owe Plaintiffs and the New Jersey members of
22 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
23 the true nature of the pricing of the test strip products described herein.
24 856. Defendants knew or should have known that their conduct was in violation of the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 203 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 212 of 274
1 857. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the New Jersey members of the Classes, and continued
5 to engage in unfair and deceptive practices in violation of the New Jersey CFA.
7 misrepresentations were material to Plaintiffs and the New Jersey members of the Classes, and
8 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
10 859. Plaintiffs and the New Jersey members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiffs and the New
13 Jersey members of the Classes to overpay for the test strip products. Because Defendants did not
14 reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was
15 filed, the statute of limitation for filing claims against Defendants under the New Jersey CFA did
16 not begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal
18 860. Plaintiffs and the New Jersey members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
22 861. As a result of the foregoing wrongful conduct of Defendants, Plaintiffs and the
23 New Jersey members of the Classes have been damaged in an amount to be proven at trial, and
24 seek all just and proper remedies, including, but not limited to, actual and statutory damages,
25 treble damages, an order enjoining Defendants deceptive and unfair conduct, costs and
26 reasonable attorneys fees under N.J. Stat. 56:8-19, and all other just and appropriate relief.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 204 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 213 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 205 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 214 of 274
1 and (14) using exaggeration, innuendo or ambiguity as to a material fact or failing to state a
3 867. In the course of their business, Defendants engaged in unfair and misleading acts
4 in violation of the New Mexico UTPA by, at a minimum: (1) making misleading statements
5 regarding the true cost of the price of test strips or causing reasonable inferences about the cost
6 that had the tendency to mislead consumers, including but not limited to publishing, setting, or
7 distributing the list price of test strips; (2) engaging in advertising concerning the role that
8 Defendants played in setting the price paid for test strips, including but not limited to marketing
9 material averring that the PBM Defendants make efforts to decrease the price of prescription
10 drugs and/or test strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature
11 of the list price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making
13 purpose(s) of discounts, rebates, and/or other payments offered by the Manufacturer Defendants
14 to the PBM Defendants and/or negotiated by the PBM Defendants in exchange for inclusion
15 and/or tier placement of the Manufacturer Defendants test strips on the PBM Defendants
16 formularies; (5) making material misrepresentations regarding or failing to disclose the portion
17 of discounts, rebates, and/or other payments from the Manufacturer Defendants that the PBM
18 Defendants keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or
19 practices by selling and/or facilitating the sale of test strips at a grossly inflated and/or
21 868. Defendants owed and continue to owe Plaintiffs and the New Mexico members of
22 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
23 the true nature of the pricing of the test strip products described herein.
24 869. Defendants knew or should have known that their conduct was in violation of the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 206 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 215 of 274
1 870. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the New Mexico members of the Classes, and
5 continued to engage in unfair and deceptive practices in violation of the New Mexico UTPA.
7 misrepresentations were material to Plaintiffs and the New Mexico members of the Classes, and
8 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
10 872. Plaintiffs and the New Mexico members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiffs and the New
13 Mexico members of the Classes to overpay for the test strip products. Because Defendants did
14 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
15 was filed, the statute of limitation for filing claims against Defendants under the New Mexico
16 UTPA did not begin to accrue until the filing of this lawsuit. Defendants either concealed or
18 873. Plaintiffs and the New Mexico members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
23 Plaintiffs and the New Mexico members of the Classes, they seek recovery of actual damages or
24 $100, whichever is greater, discretionary treble damages, punitive damages, and reasonable
25 attorneys fees and costs, as well as all other proper and just relief available under N.M. Stat.
26 Ann. 57-12-10.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 207 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 216 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 208 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 217 of 274
1 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
2 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
3 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
5 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
6 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
7 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
9 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
10 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
11 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
12 point.
13 883. Defendants owed and continue to owe Plaintiffs and the New York members of
14 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
15 the true nature of the pricing of the test strip products described herein.
16 884. Defendants knew or should have known that their conduct was in violation of the
17 NY DAPA.
18 885. Despite knowing the true nature of their products and practices for years,
20 regarding the quality and characteristics of the test strip products described herein, with the
21 intent to mislead regulators, Plaintiffs the New York members of the Classes, and continued to
24 misrepresentations were material to Plaintiffs and the New York members of the Classes, and
25 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 209 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 218 of 274
1 887. Plaintiffs and the New York members of the Classes relied upon Defendants
2 material misrepresentations and omissions regarding the test strip products, as set forth above.
3 These material misrepresentations by Defendants proximately caused Plaintiffs and the New
4 York members of the Classes to overpay for the test strip products. Because Defendants did not
5 reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was
6 filed, the statute of limitation for filing claims against Defendants under the NY DAPA did not
7 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
9 888. Plaintiffs and the New York members of the Classes suffered injury-in-fact,
10 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
12 increased and unfair prices paid for the test strip products described herein.
14 Defendants, Plaintiffs and the New York members Classes have been damaged in an amount to
15 be proven at trial, and seek all just and proper remedies, including but not limited to actual
16 damages or $50, whichever is greater, treble damages up to $1,000, punitive damages to the
17 extent available under the law, reasonable attorneys fees and costs, an order enjoining
18 Defendants deceptive and unfair conduct, and all other just and appropriate relief available
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 210 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 219 of 274
1 residents of North Carolina at any relevant time (the North Carolina members of the Classes)
3 892. Plaintiffs and the North Carolina members of the Classes are persons under the
4 North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. 75-1.1, et seq.
5 (NCUDTPA).
6 893. Defendants acts and practices complained of herein were performed in the course
7 of Defendants trade or business and thus occurred in or affected commerce, as defined in N.C.
11 NCUDTPA provides a private right of action for any person injured by reason of any act or
12 thing done by any other person, firm or corporation in violation of the NCUDTPA. N.C. Gen.
13 Stat. 75-16.
14 895. In the course of their business Defendants engaged in unfair and deceptive acts or
15 practices in violation of the NCUDTPA by, at a minimum: (1) making misleading statements
16 regarding the true cost of the price of test strips or causing reasonable inferences about the cost
17 that had the tendency to mislead consumers, including but not limited to publishing, setting, or
18 distributing the list price of test strips; (2) engaging in advertising concerning the role that
19 Defendants played in setting the price paid for test strips, including but not limited to marketing
20 material averring that the PBM Defendants make efforts to decrease the price of prescription
21 drugs and/or test strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature
22 of the list price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making
24 purpose(s) of discounts, rebates, and/or other payments offered by the Manufacturer Defendants
25 to the PBM Defendants and/or negotiated by the PBM Defendants in exchange for inclusion
26 and/or tier placement of the Manufacturer Defendants test strips on the PBM Defendants
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 211 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 220 of 274
1 formularies; (5) making material misrepresentations regarding or failing to disclose the portion
2 of discounts, rebates, and/or other payments from the Manufacturer Defendants that the PBM
3 Defendants keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or
4 practices by selling and/or facilitating the sale of test strips at a grossly inflated and/or
6 896. Defendants owed and continue to owe Plaintiffs and the North Carolina members
7 of the Classes a duty to refrain from the above-described unfair and deceptive practices and
8 disclose the true nature of the pricing of the test strip products described herein.
9 897. Defendants knew or should have known that their conduct was in violation of the
10 NCUDTPA.
11 898. Despite knowing the true nature of their products and practices for years,
13 regarding the quality and characteristics of the test strip products described herein, with the
14 intent to mislead regulators, Plaintiffs and the North Carolina members of the Classes, and
17 misrepresentations were material to Plaintiffs and the North Carolina members of the Classes,
18 and were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
20 900. Plaintiffs and the North Carolina members of the Classes relied upon Defendants
21 material misrepresentations and omissions regarding the test strip products, as set forth above.
22 These material misrepresentations by Defendants proximately caused Plaintiffs and the North
23 Carolina members of the Classes to overpay for the test strip products. Because Defendants did
24 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
25 was filed, the statute of limitation for filing claims against Defendants under the NCUDTPA did
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 212 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 221 of 274
1 not begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal
3 901. Plaintiffs and the North Carolina members of the Classes suffered injury-in-fact,
4 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
6 increased and unfair prices paid for the test strip products described herein.
8 general public, who in many cases are unable to afford or gain access to test strip products. As
9 such, Defendants unlawful acts and practices complained of herein affect the public interest.
10 903. As a result of the foregoing wrongful conduct of Defendants, Plaintiffs and the
11 North Carolina members of the Classes have been damaged in an amount to be proven at trial,
12 and seek all just and proper remedies, including but not limited to treble damages, an order
13 enjoining Defendants deceptive and unfair conduct, court costs and reasonable attorneys fees,
14 and any other just and proper relief available under N.C. Gen. Stat. 75-16.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 213 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 222 of 274
1 thereon in connection with the sale or advertisement of any merchandise, whether or not any
2 person has in fact been misled, deceived, or damaged thereby. N.D. Cent. Code 51-15-02.
3 907. For purposes of the North Dakota USAPL, each Defendant is a person. N.D.
5 908. Test strips are merchandise under the North Dakota USAPL, for which
6 Defendants conducted advertisement and which they offered for sale, as those terms are
8 909. Defendants violated the North Dakota USAPL, at a minimum by: (1) making
9 misleading statements regarding the true cost of the price of test strips or causing reasonable
10 inferences about the cost that had the tendency to mislead consumers, including but not limited
11 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
12 concerning the role that Defendants played in setting the price paid for test strips, including but
13 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
14 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
15 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
16 for test strips; (4) making material misrepresentations regarding or failing to disclose the
17 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
18 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
19 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
21 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
22 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
23 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 214 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 223 of 274
1 910. The foregoing violations caused harm to Plaintiffs and the North Dakota members
2 of the Classes, and are likely to harm consumers in the future if Defendants practices are not
3 stopped.
4 911. Plaintiffs and the North Dakota members of the Classes seek an injunction to
5 protect the public from further violations of the North Dakota USAPL by Defendants.
7 and the North Dakota members of the Classes seek three times the actual damages as well as
8 costs, disbursements, and actual reasonable attorneys fees incurred in the action. N.D. Cent.
9 Code 51-15-09.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 215 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 224 of 274
1 from (i) representing that goods have characteristics, uses or benefits which the goods do not
2 have; (ii) representing that their goods are of a particular quality or grade that the product is not;
3 and (iii) representing that the subject of a consumer transaction has been supplied in accordance
5 919. In the course of their business, Defendants engaged in unfair and deceptive
6 practices in violation of the Ohio CSPA by, at a minimum: (1) making misleading statements
7 regarding the true cost of the price of test strips or causing reasonable inferences about the cost
8 that had the tendency to mislead consumers, including but not limited to publishing, setting, or
9 distributing the list price of test strips; (2) engaging in advertising concerning the role that
10 Defendants played in setting the price paid for test strips, including but not limited to marketing
11 material averring that the PBM Defendants make efforts to decrease the price of prescription
12 drugs and/or test strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature
13 of the list price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making
15 purpose(s) of discounts, rebates, and/or other payments offered by the Manufacturer Defendants
16 to the PBM Defendants and/or negotiated by the PBM Defendants in exchange for inclusion
17 and/or tier placement of the Manufacturer Defendants test strips on the PBM Defendants
18 formularies; (5) making material misrepresentations regarding or failing to disclose the portion
19 of discounts, rebates, and/or other payments from the Manufacturer Defendants that the PBM
20 Defendants keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or
21 practices by selling and/or facilitating the sale of test strips at a grossly inflated and/or
23 920. Defendants owed and continue to owe Plaintiffs and the Ohio members of the
24 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
25 true nature of the pricing of the test strip products described herein.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 216 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 225 of 274
1 921. Defendants knew or should have known that their conduct was in violation of the
2 Ohio CSPA.
3 922. Despite knowing the true nature of their products and practices for years,
5 regarding the quality and characteristics of the test strip products described herein, with the
6 intent to mislead regulators, Plaintiffs and the Ohio members of the Classes, and continued to
9 misrepresentations were material to Plaintiffs and the Ohio members of the Classes, and were
10 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
12 924. Plaintiffs and Ohio members of the Classes relied upon Defendants material
13 misrepresentations and omissions regarding the test strip products, as set forth above. These
14 material misrepresentations by Defendants proximately caused Plaintiff and the Ohio members
15 of the Classes to overpay for the test strip products. Because Defendants did not reveal the true
16 nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed, the
17 statute of limitation for filing claims against Defendants under the Ohio CSPA did not begin to
18 accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
20 925. Plaintiffs and the Ohio members of the Classes suffered injury-in-fact,
21 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
23 increased and unfair prices paid for the test strip products described herein.
25 general public, who in many cases are unable to afford or gain access to test strip products. As
26 such, Defendants unlawful acts and practices complained of herein affect the public interest.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 217 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 226 of 274
1 927. Pursuant to Ohio Rev. Code 1345.09, Plaintiffs and the Ohio members of the
2 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, actual
3 damages - trebled, and attorneys fees, costs, and any other just and proper relief, to the extend
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 218 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 227 of 274
1 particular standard, quality, or grade, or that goods are of a particular style or model, if they are
2 of another; . . . (11) Advertises goods or services with intent not to sell them as advertised [or]
3 (12) Makes false statements of fact concerning the reasons for, existence of, or amounts of price
4 reductions.
5 933. In the course of their business, Defendants engaged in deceptive trade practices in
6 violation of the Ohio DPTA by, at a minimum: (1) making misleading statements regarding the
7 true cost of the price of test strips or causing reasonable inferences about the cost that had the
8 tendency to mislead consumers, including but not limited to publishing, setting, or distributing
9 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
10 in setting the price paid for test strips, including but not limited to marketing material averring
11 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
12 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
13 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
15 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
16 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
17 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
19 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
20 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
21 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
22 point.
23 934. Defendants owed and continue to owe Plaintiffs and the Ohio members of the
24 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
25 true nature of the pricing of the test strip products described herein.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 219 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 228 of 274
1 935. Defendants knew or should have known that their conduct was in violation of the
2 Ohio DTPA.
3 936. Despite knowing the true nature of their products and practices for years,
5 regarding the quality and characteristics of the test strip products described herein, with the
6 intent to mislead regulators, Plaintiffs and the Ohio members of the Classes, and continued to
9 misrepresentations were material to Plaintiffs and the Ohio members of the Classes, and were
10 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
12 938. Plaintiffs and the Ohio members of the Classes relied upon Defendants material
13 misrepresentations and omissions regarding the test strip products, as set forth above. These
14 material misrepresentations by Defendants proximately caused Plaintiff and the Ohio members
15 of the Classes to overpay for the test strip products. Because Defendants did not reveal the true
16 nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed, the
17 statute of limitation for filing claims against Defendants under the Ohio DTPA did not begin to
18 accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
20 939. Plaintiffs and the Ohio members of the Classes suffered injury-in-fact,
21 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
23 increased and unfair prices paid for the test strip products described herein.
25 general public, who in many cases are unable to afford or gain access to test strip products. As
26 such, Defendants unlawful acts and practices complained of herein affect the public interest.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 220 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 229 of 274
1 941. Pursuant to Ohio Rev. Code 4165.03, Plaintiffs and the Ohio members of the
2 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, damages,
3 punitive damages, and attorneys fees, costs, and any other just and proper relief available under
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 221 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 230 of 274
1 947. Defendants engaged in unfair and deceptive trade practices in violation of the
2 Oklahoma CPA by, at a minimum: (1) making misleading statements regarding the true cost of
3 the price of test strips or causing reasonable inferences about the cost that had the tendency to
4 mislead consumers, including but not limited to publishing, setting, or distributing the list price
5 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
6 the price paid for test strips, including but not limited to marketing material averring that the
7 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
8 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
9 and/or charged by the Manufacturer Defendants for test strips; (4) making material
11 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
12 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
13 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
15 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
16 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
17 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
18 point.
19 948. Defendants owed and continue to owe Plaintiffs and the Oklahoma members of
20 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
21 the true nature of the pricing of the test strip products described herein.
22 949. Defendants knew or should have known that their conduct was in violation of the
23 Oklahoma CPA.
24 950. Despite knowing the true nature of their products and practices for years,
26 regarding the quality and characteristics of the test strip products described herein, with the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 222 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 231 of 274
1 intent to mislead regulators, Plaintiffs and the Oklahoma members of the Classes, and continued
4 misrepresentations were material to Plaintiffs and the Oklahoma members of the Classes, and
5 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
7 952. Plaintiffs and the Oklahoma members of the Classes relied upon Defendants
8 material misrepresentations and omissions regarding the test strip products, as set forth above.
10 Oklahoma members of the Classes to overpay for the test strip products. Because Defendants did
11 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
12 was filed, the statute of limitation for filing claims against Defendants under the Oklahoma CPA
13 did not begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to
15 953. Plaintiffs and the Oklahoma members of the Classes suffered injury-in-fact,
16 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
18 increased and unfair prices paid for the test strip products described herein.
20 general public, who in many cases are unable to afford or gain access to test strip products. As
21 such, Defendants unlawful acts and practices complained of herein affect the public interest.
22 955. Pursuant to Okla. Stat. Tit. 15 761.1, Plaintiffs and the Oklahoma members of
23 the Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices,
24 damages, punitive damages, and attorneys fees, costs, and any other just and proper relief
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 223 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 232 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 224 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 233 of 274
1 strips; (2) engaging in advertising concerning the role that Defendants played in setting the price
2 paid for test strips, including but not limited to marketing material averring that the PBM
3 Defendants make efforts to decrease the price of prescription drugs and/or test strips for
4 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
5 and/or charged by the Manufacturer Defendants for test strips; (4) making material
7 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
8 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
9 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
11 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
12 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
13 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
14 point.
15 962. Defendants owed and continue to owe Plaintiffs and the Oregon members of the
16 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
17 true nature of the pricing of the test strip products described herein.
18 963. Defendants knew or should have known that their conduct was in violation of the
19 Oregon UTPA.
20 964. Despite knowing the true nature of their products and practices for years,
22 regarding the quality and characteristics of the test strip products described herein, with the
23 intent to mislead regulators, Plaintiffs and the Oregon members of the Classes, and continued to
26 misrepresentations were material to Plaintiffs and the Oregon members of the Classes, and were
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 225 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 234 of 274
1 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
3 966. Plaintiffs and the Oregon members of the Classes relied upon Defendants
4 material misrepresentations and omissions regarding the test strip products, as set forth above.
5 These material misrepresentations by Defendants proximately caused Plaintiffs and the Oregon
6 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
7 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
8 the statute of limitation for filing claims against Defendants under the Oregon UTPA did not
9 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
11 967. Plaintiffs and the Oregon members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest.
18 969. Pursuant to Or. Rev. Stat. 646.638, Plaintiffs and the Oregon members of the
19 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, damages,
20 punitive damages, and attorneys fees, costs, and any other just and proper relief available under
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 226 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 235 of 274
1 971. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are residents of or who
3 have been residents of the State of Pennsylvania during any relevant period (the Pennsylvania
4 members of the Classes) against all Defendants (for the purposes of this section, Defendants).
5 972. Defendants, Plaintiffs and the Pennsylvania members of the Classes are persons
7 973. Defendants are engaged in trade or commerce within the meaning of 73 P.S.
9 974. The Pennsylvania Unfair Trade Practices Act (Pennsylvania UTPA) prohibits
10 unfair or deceptive acts or practices in the conduct of any trade or commerce, including but not
14 another; (v) Representing that goods or services have sponsorship, approval, characteristics,
15 ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship,
16 approval, status, affiliation, or connection that he does not have; and (xi) Making false or
17 misleading statements of fact concerning the reasons for, existence of, or amounts of price
19 975. Defendants engaged in unfair and deceptive acts or practices in violation of the
20 Pennsylvania UTPA by, at a minimum: (1) making misleading statements regarding the true cost
21 of the price of test strips or causing reasonable inferences about the cost that had the tendency to
22 mislead consumers, including but not limited to publishing, setting, or distributing the list price
23 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
24 the price paid for test strips, including but not limited to marketing material averring that the
25 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
26 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 227 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 236 of 274
1 and/or charged by the Manufacturer Defendants for test strips; (4) making material
3 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
4 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
5 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
7 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
8 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
9 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
10 point.
11 976. Defendants owed and continue to owe Plaintiffs and the Pennsylvania members of
12 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
13 the true nature of the pricing of the test strip products described herein.
14 977. Defendants knew or should have known that their conduct was in violation of the
15 Pennsylvania UTPA.
16 978. Despite knowing the true nature of their products and practices for years,
18 regarding the quality and characteristics of the test strip products described herein, with the
19 intent to mislead regulators, Plaintiffs and the Pennsylvania members of the Classes, and
20 continued to engage in unfair and deceptive practices in violation of the Pennsylvania UTPA.
22 misrepresentations were material to Plaintiffs and the Pennsylvania members of the Classes, and
23 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
25 980. Plaintiffs and the Pennsylvania members of the Classes relied upon Defendants
26 material misrepresentations and omissions regarding the test strip products, as set forth above.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 228 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 237 of 274
2 Pennsylvania members of the Classes to overpay for the test strip products. Because Defendants
3 did not reveal the true nature of the Test Strip Pricing Scheme as described herein until this
4 lawsuit was filed, the statute of limitation for filing claims against Defendants under the
5 Pennsylvania UTPA did not begin to accrue until the filing of this lawsuit. Defendants either
7 981. Plaintiffs and the Pennsylvania members of the Classes suffered injury-in-fact,
8 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
10 increased and unfair prices paid for the test strip products described herein.
12 general public, who in many cases are unable to afford or gain access to test strip products. As
13 such, Defendants unlawful acts and practices complained of herein affect the public interest.
14 983. Pursuant to 73 P.S. 201-9.2(a), Plaintiffs and the Pennsylvania members of the
15 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, damages,
16 punitive damages, and attorneys fees, costs, and any other just and proper relief available under
24 985. Plaintiffs bring this action on behalf of themselves and all members of the Non-
25 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are residents or have
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 229 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 238 of 274
1 been residents of the State of Rhode Island during the relevant period (the Rhode Island
2 members of the Classes) against all Defendants (for the purposes of this section, Defendants).
3 986. The Rhode Island Unfair Trade Practices and Consumer Protection Act (Rhode
4 Island CPA) provides that [u]nfair methods of competition and unfair or deceptive acts or
5 practices in the conduct of any trade or commerce are declared unlawful. R.I. Gen. Laws 6-
6 13.1-2. The Rhode Island CPA prohibits acts such as [m]aking false or misleading statements of
7 fact concerning the reasons for, existence of, or amounts of price reductions; [e]ngaging in any
9 [e]ngaging in any act or practice that is unfair or deceptive to the consumer; and [u]sing any
10 other methods, acts, or practices that mislead or deceive members of the public in a material
12 987. Defendants activities in regard to test strips constitute trade and commerce
14 988. Plaintiffs bought test strips primarily for personal, family, or household
16 989. Defendants violated the Rhode Island CPA, at a minimum by: (1) making
17 misleading statements regarding the true cost of the price of test strips or causing reasonable
18 inferences about the cost that had the tendency to mislead consumers, including but not limited
19 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
20 concerning the role that Defendants played in setting the price paid for test strips, including but
21 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
22 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
23 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
24 for test strips; (4) making material misrepresentations regarding or failing to disclose the
25 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
26 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 230 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 239 of 274
1 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
3 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
4 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
5 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
7 990. The foregoing violations caused harm to Plaintiffs and the Rhode Island members
8 of the Classes, and are likely to harm consumers in the future if Defendants practices are not
9 stopped.
10 991. Plaintiffs and the Rhode Island members of the Classes seek an injunction to
11 protect the public from further violations of the Rhode Island CPA by Defendants. R.I. Gen.
12 Laws 6-13.1-5.2.
13 992. Furthermore, Plaintiffs and the Rhode Island members of the Classes are entitled
14 to actual damages or $200, whichever is greater. Plaintiffs and the Rhode Island members of the
15 Classes also seek punitive damages, reasonable attorneys fees and costs, and other equitable
16 relief that the Court deems necessary and proper. R.I. Gen. Laws 6-13.1-5.2.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 231 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 240 of 274
1 995. Defendants, Plaintiffs and the South Carolina members of the Classes are
3 996. Defendants are engaged in trade or commerce within the meaning of S.C.
5 997. The South Carolina Unfair Trade Practices Act (South Carolina UTPA)
6 prohibits unfair or deceptive acts or practices in the conduct of any trade or commerce. S.C.
7 Code 39-5-20(a).
8 998. Defendants engaged in unfair and deceptive acts in violation of the South
9 Carolina UTPA by, at a minimum: (1) making misleading statements regarding the true cost of
10 the price of test strips or causing reasonable inferences about the cost that had the tendency to
11 mislead consumers, including but not limited to publishing, setting, or distributing the list price
12 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
13 the price paid for test strips, including but not limited to marketing material averring that the
14 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
15 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
16 and/or charged by the Manufacturer Defendants for test strips; (4) making material
18 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
19 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
20 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
22 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
23 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
24 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
25 point.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 232 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 241 of 274
1 999. Defendants owed and continue to owe Plaintiffs and the South Carolina members
2 of the Classes a duty to refrain from the above-described unfair and deceptive practices and
3 disclose the true nature of the pricing of the test strip products described herein.
4 1000. Defendants knew or should have known that their conduct was in violation of the
6 1001. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the South Carolina members of the Classes, and
10 continued to engage in unfair and deceptive practices in violation of the South Carolina UTPA.
12 misrepresentations were material to Plaintiffs and the South Carolina members of the Classes,
13 and were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 1003. Plaintiffs and the South Carolina members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products, as set forth above.
17 These material misrepresentations by Defendants proximately caused Plaintiffs and the South
18 Carolina members of the Classes to overpay for the test strip products. Because Defendants did
19 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
20 was filed, the statute of limitation for filing claims against Defendants under the South Carolina
21 UTPA did not begin to accrue until the filing of this lawsuit. Defendants either concealed or
23 1004. Plaintiffs and the South Carolina members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 233 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 242 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
4 1006. Pursuant to S.C. Code 39-5-140(a), Plaintiffs and the South Carolina members
5 of the Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices,
6 damages, treble damages for willful and knowing violations, punitive damages, and attorneys
7 fees, costs, and any other just and proper relief available under the South Carolina UTPA.
14 1008. Plaintiffs bring this action on behalf of themselves and all members of the Non-
15 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are residents or have
16 been residents of the State of South Dakota during the relevant period (the South Dakota
17 members of the Classes) against all Defendants (for the purposes of this section, Defendants).
18 1009. South Dakotas Deceptive Trade Practices and Consumer Protection Law (South
19 Dakota CPL) provides that, among other things, it is a deceptive act or practice to [k]nowingly
20 act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or
21 misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or
22 advertisement of any merchandise, regardless of whether any person has in fact been misled,
24 1010. Defendants violated the South Dakota CPL, at a minimum by: (1) making
25 misleading statements regarding the true cost of the price of test strips or causing reasonable
26 inferences about the cost that had the tendency to mislead consumers, including but not limited
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 234 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 243 of 274
1 to publishing, setting, or distributing the list price of test strips; (2) engaging in advertising
2 concerning the role that Defendants played in setting the price paid for test strips, including but
3 not limited to marketing material averring that the PBM Defendants make efforts to decrease the
4 price of prescription drugs and/or test strips for consumers; (3) failing to disclose the inflated
5 and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer Defendants
6 for test strips; (4) making material misrepresentations regarding or failing to disclose the
7 existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by the
8 Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants in
9 exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on the
11 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
12 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
13 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
15 1011. The foregoing violations caused harm to Plaintiffs and the members of the
16 Classes, and are likely to harm consumers in the future if Defendants practices are not stopped.
17 1012. The South Dakota CPL provides that [a]ny person who claims to have been
19 permitted to bring a civil action for the recovery of actual damages suffered as a result of such
20 act or practice. S.D. Codified Laws 37-24-31. Plaintiffs and the South Dakota members of the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 235 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 244 of 274
1 1014. Plaintiffs bring this count of behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
3 residents of the State of Tennessee during any relevant time period (the Tennessee members of
4 the Classes) against all Defendants (for the purposes of this section, Defendants).
5 1015. Plaintiffs and the Tennessee members of the Classes are natural persons and
7 1016. Defendants are person[s] within the meaning of Tenn. Code 47-18-103(9).
9 the meaning Tenn. Code 47-18-103(9) with respect to the conduct alleged herein.
10 1018. The Tennessee Consumer Protection Act (Tennessee CPA) prohibits unfair or
11 deceptive acts or practices affecting the conduct of any trade or commerce including but not
15 by, another.; (5) Representing that goods or services have sponsorship, approval,
16 characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has
17 a sponsorship approval, status, affiliation or connection that such person does not have; (11)
18 Making false or misleading statements of fact concerning the reasons for, existence of, or
19 amounts of price reductions; and (27) Engaging in any other act or practice which is deceptive
21 1019. Defendants engaged in unfair and deceptive acts in violation of the Tennessee
22 CPA by, at a minimum: (1) making misleading statements regarding the true cost of the price of
23 test strips or causing reasonable inferences about the cost that had the tendency to mislead
24 consumers, including but not limited to publishing, setting, or distributing the list price of test
25 strips; (2) engaging in advertising concerning the role that Defendants played in setting the price
26 paid for test strips, including but not limited to marketing material averring that the PBM
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 236 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 245 of 274
1 Defendants make efforts to decrease the price of prescription drugs and/or test strips for
2 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
3 and/or charged by the Manufacturer Defendants for test strips; (4) making material
5 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
6 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
7 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
9 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
10 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
11 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
12 point.
13 1020. Defendants owed and continue to owe Plaintiffs and the Tennessee members of
14 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
15 the true nature of the pricing of the test strip products described herein.
16 1021. Defendants knew or should have known that their conduct was in violation of the
17 Tennessee CPA.
18 1022. Despite knowing the true nature of their products and practices for years,
20 regarding the quality and characteristics of the test strip products described herein, with the
21 intent to mislead regulators, Plaintiffs and the Tennessee members of the Classes, and continued
24 misrepresentations were material to Plaintiffs and the Tennessee members of the Classes, and
25 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 237 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 246 of 274
1 1024. Plaintiffs and the Tennessee members of the Classes relied upon Defendants
2 material misrepresentations and omissions regarding the test strip products, as set forth above.
4 Tennessee members of the Classes to overpay for the test strip products. Because Defendants did
5 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
6 was filed, the statute of limitation for filing claims against Defendants under the Tennessee CPA
7 did not begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to
9 1025. Plaintiffs and the Tennessee members of the Classes suffered injury-in-fact,
10 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
12 increased and unfair prices paid for the test strip products described herein.
14 general public, who in many cases are unable to afford or gain access to test strip products. As
15 such, Defendants unlawful acts and practices complained of herein affect the public interest.
16 1027. Pursuant to Tenn. Code 47-18-109, Plaintiffs and the Tennessee members of the
17 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, damages,
18 treble damages for willful and knowing violations, pursuant to 47-18-109(a)(3), punitive
19 damages, and attorneys fees, costs, and any other just and proper relief to the extent available
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 238 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 247 of 274
1 1029. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
3 residents of the State of Texas during any relevant period (the Texas members of the Classes)
5 1030. The TDTPA, Tex. Bus. & Com. Code Ann. 17.41, et. seq., prohibits the use of
7 transaction.
8 1031. Plaintiffs and the Texas members of the Classes are individuals, partnerships or
9 corporations with assets of less than $25 million (or are controlled by corporations or entities
10 with less than $25 million in assets), see Tex. Bus. & Com. Code 17.41, and are therefore
12 1032. Defendants are person[s] within the meaning of Tex. Bus. & Com. Code
13 17.45(3).
15 transactions within the meaning Tex. Bus. & Com. Code 17.46(a) with respect to the conduct
16 alleged herein.
17 1034. The Texas Deceptive Trade Practices Consumer Protection Act (Texas
18 DTPA) prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or
19 commerce, Tex. Bus. & Com. Code 17.46(a), and unconscionable action[s] or course of
20 action[s], which means act[s] or practice[s] which, to a consumers detriment, takes advantage
21 of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair
24 practices in violation of the Texas DTPA by, at a minimum: (1) making misleading statements
25 regarding the true cost of the price of test strips or causing reasonable inferences about the cost
26 that had the tendency to mislead consumers, including but not limited to publishing, setting, or
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 239 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 248 of 274
1 distributing the list price of test strips; (2) engaging in advertising concerning the role that
2 Defendants played in setting the price paid for test strips, including but not limited to marketing
3 material averring that the PBM Defendants make efforts to decrease the price of prescription
4 drugs and/or test strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature
5 of the list price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making
7 purpose(s) of discounts, rebates, and/or other payments offered by the Manufacturer Defendants
8 to the PBM Defendants and/or negotiated by the PBM Defendants in exchange for inclusion
9 and/or tier placement of the Manufacturer Defendants test strips on the PBM Defendants
10 formularies; (5) making material misrepresentations regarding or failing to disclose the portion
11 of discounts, rebates, and/or other payments from the Manufacturer Defendants that the PBM
12 Defendants keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or
13 practices by selling and/or facilitating the sale of test strips at a grossly inflated and/or
15 1036. Defendants owed and continue to owe Plaintiffs and the Texas members of the
16 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
17 true nature of the pricing of the test strip products described herein.
18 1037. Defendants knew or should have known that their conduct was in violation of the
19 Texas DTPA.
20 1038. Despite knowing the true nature of their products and practices for years,
22 regarding the quality and characteristics of the test strip products described herein, with the
23 intent to mislead regulators, Plaintiffs and the Texas members of the Classes, and continued to
26 misrepresentations were material to Plaintiffs and the Texas members of the Classes, and were
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 240 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 249 of 274
1 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
3 1040. Plaintiffs and the Texas members of the Classes relied upon Defendants material
4 misrepresentations and omissions regarding the test strip products, as set forth above. These
5 material misrepresentations by Defendants proximately caused Plaintiff and the Texas members
6 of the Classes to overpay for the test strip products. Because Defendants did not reveal the true
7 nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed, the
8 statute of limitation for filing claims against Defendants under the Texas DTPA did not begin to
9 accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
11 1041. Plaintiffs and the Texas members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest.
18 1043. Pursuant to Tex. Bus. & Com. Code 17.50, Plaintiffs and the Texas members of
19 the Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices,
20 damages, multiple damages for knowing and intentional violations, pursuant to 17.50(b)(1),
21 punitive damages, and attorneys fees, costs, and any other just and proper relief available under
23 1044. On or about the date of this filing, certain Plaintiffs sent a letter complying with
24 Tex. Bus. & Com. Code 17.505(a). If Defendants fail to remedy their unlawful conduct within
25 the requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the Texas
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 241 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 250 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 242 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 251 of 274
1 the list price of test strips; (2) engaging in advertising concerning the role that Defendants played
2 in setting the price paid for test strips, including but not limited to marketing material averring
3 that the PBM Defendants make efforts to decrease the price of prescription drugs and/or test
4 strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list
5 price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making material
7 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
8 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
9 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
11 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
12 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
13 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
14 point.
15 1052. Defendants owed and continue to owe Plaintiffs and the Utah members of the
16 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
17 true nature of the pricing of the test strip products described herein.
18 1053. Defendants knew or should have known that their conduct was in violation of the
19 Utah CSPA.
20 1054. Despite knowing the true nature of their products and practices for years,
22 regarding the quality and characteristics of the test strip products described herein, with the
23 intent to mislead regulators, Plaintiffs and the Utah members of the Classes, and continued to
26 misrepresentations were material to Plaintiffs and the Utah members of the Classes, and were
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 243 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 252 of 274
1 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
3 1056. Plaintiffs and the Utah members of the Classes relied upon Defendants material
4 misrepresentations and omissions regarding the test strip products, as set forth above. These
5 material misrepresentations by Defendants proximately caused Plaintiffs and the Utah members
6 of the Classes to overpay for the test strip products. Because Defendants did not reveal the true
7 nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed, the
8 statute of limitation for filing claims against Defendants under the Utah CSPA did not begin to
9 accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the facts
11 1057. Plaintiffs and the Utah members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest
18 1059. Plaintiffs and the Utah members of the Classes seek an order enjoining
19 Defendants unfair and/or deceptive acts or practices, damages, multiple damages for knowing
20 and intentional violations, punitive damages, and attorneys fees, costs, and any other just and
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 244 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 253 of 274
1 1061. Plaintiffs bring this action on behalf of themselves and all members of the Non-
2 ERISA Employee/Exchange Plan Class and/or the Uninsured Class who are or have been
3 residents of the State of Vermont during any relevant time period (the Vermont members of the
4 Classes), against all Defendants (for the purposes of this section, Defendants).
5 1062. Plaintiffs and the Vermont Classes are consumers within the meaning of Vt.
7 1063. Defendants are person[s] within the meaning of Vt. Code R. 100(3) (citing Vt.
9 1064. Defendants are engaged in commerce within the meaning of Vt. Stat. Tit. 9,
11 1065. The Vermont Consumer Protection Act (Vermont CPA) prohibits [u]nfair
14 1066. Defendants engaged in unfair and deceptive conduct in violation of the Vermont
15 CPA by, at a minimum: (1) making misleading statements regarding the true cost of the price of
16 test strips or causing reasonable inferences about the cost that had the tendency to mislead
17 consumers, including but not limited to publishing, setting, or distributing the list price of test
18 strips; (2) engaging in advertising concerning the role that Defendants played in setting the price
19 paid for test strips, including but not limited to marketing material averring that the PBM
20 Defendants make efforts to decrease the price of prescription drugs and/or test strips for
21 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
22 and/or charged by the Manufacturer Defendants for test strips; (4) making material
24 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
25 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
26 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 245 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 254 of 274
2 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
3 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
4 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
5 point.
6 1067. Defendants owed and continue to owe Plaintiffs and the Vermont members of the
7 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
8 true nature of the pricing of the test strip products described herein.
9 1068. Defendants knew or should have known that their conduct was in violation of the
10 Vermont CPA.
11 1069. Despite knowing the true nature of their products and practices for years,
13 regarding the quality and characteristics of the test strip products described herein, with the
14 intent to mislead regulators, Plaintiffs and the Vermont members of the Classes, and continued to
17 misrepresentations were material to Plaintiffs and the Vermont members of the Classes, and were
18 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
20 1071. Plaintiffs and Vermont members of the Classes relied upon Defendants material
21 misrepresentations and omissions regarding the test strip products, as set forth above. These
23 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
24 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
25 the statute of limitation for filing claims against Defendants under the Vermont CPA did not
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 246 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 255 of 274
1 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
3 1072. Plaintiffs and the Vermont members of the Classes suffered injury-in-fact,
4 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
6 increased and unfair prices paid for the test strip products described herein.
8 general public, who in many cases are unable to afford or gain access to test strip products. As
9 such, Defendants unlawful acts and practices complained of herein affect the public interest.
10 1074. Pursuant to Vt. Stat. Tit. 9, 2461(b), Plaintiffs and the Vermont members of the
11 Classes seek an order enjoining Defendants unfair and/or deceptive acts or practices, actual
12 damages, damages up to three times the consideration provided, punitive damages, attorneys
13 fees, costs, and any other just and proper relief available under the Vermont CPA.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 247 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 256 of 274
1 1079. The Virginia Consumer Protection Act (Virginia CPA) makes unlawful
4 CPA, at a minimum by: (1) making misleading statements regarding the true cost of the price of
5 test strips or causing reasonable inferences about the cost that had the tendency to mislead
6 consumers, including but not limited to publishing, setting, or distributing the list price of test
7 strips; (2) engaging in advertising concerning the role that Defendants played in setting the price
8 paid for test strips, including but not limited to marketing material averring that the PBM
9 Defendants make efforts to decrease the price of prescription drugs and/or test strips for
10 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
11 and/or charged by the Manufacturer Defendants for test strips; (4) making material
13 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
14 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
15 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
17 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
18 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
19 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
20 point.
21 1081. Defendants owed and continue to owe Plaintiffs and the Virginia members of the
22 Classes a duty to refrain from the above-described unfair and deceptive practices and disclose the
23 true nature of the pricing of the test strip products described herein.
24 1082. Defendants knew or should have known that their conduct was in violation of the
25 Virginia CPA.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 248 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 257 of 274
1 1083. Despite knowing the true nature of their products and practices for years,
3 regarding the quality and characteristics of the test strip products described herein, with the
4 intent to mislead regulators, Plaintiffs and the Virginia members of the Classes, and continued to
7 misrepresentations were material to Plaintiffs and the Virginia members of the Classes, and were
8 likely to and/or did, in fact, deceive regulators and reasonable consumers, including Plaintiffs
10 1085. Plaintiffs and other Virginia members of the Classes relied upon Defendants
11 material misrepresentations and omissions regarding the test strip products, as set forth above.
12 These material misrepresentations by Defendants proximately caused Plaintiffs and the Virginia
13 members of the Classes to overpay for the test strip products. Because Defendants did not reveal
14 the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit was filed,
15 the statute of limitation for filing claims against Defendants under the Virginia CPA did not
16 begin to accrue until the filing of this lawsuit. Defendants either concealed or failed to reveal the
18 1086. Plaintiffs and the Virginia members of the Classes suffered injury-in-fact,
19 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
21 increased and unfair prices paid for the test strip products described herein.
23 general public, who in many cases are unable to afford or gain access to test strip products. As
24 such, Defendants unlawful acts and practices complained of herein affect the public interest.
25 1088. Pursuant to Va. Code 59.1-204(A)(B), Plaintiffs and the Virginia members of
26 the Classes are entitled to the greater of actual damages or $500 for each Virginia member of the
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 249 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 258 of 274
1 Classes, attorneys fees, and costs. Because Defendants actions were willful, Plaintiffs and the
2 Virginia members of the Classes should each receive the greater of treble damages or $1,000. Id.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 250 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 259 of 274
1 Defendants played in setting the price paid for test strips, including but not limited to marketing
2 material averring that the PBM Defendants make efforts to decrease the price of prescription
3 drugs and/or test strips for consumers; (3) failing to disclose the inflated and/or fraudulent nature
4 of the list price(s) set and/or charged by the Manufacturer Defendants for test strips; (4) making
6 purpose(s) of discounts, rebates, and/or other payments offered by the Manufacturer Defendants
7 to the PBM Defendants and/or negotiated by the PBM Defendants in exchange for inclusion
8 and/or tier placement of the Manufacturer Defendants test strips on the PBM Defendants
9 formularies; (5) making material misrepresentations regarding or failing to disclose the portion
10 of discounts, rebates, and/or other payments from the Manufacturer Defendants that the PBM
11 Defendants keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or
12 practices by selling and/or facilitating the sale of test strips at a grossly inflated and/or
14 1096. Defendants owed and continue to owe Plaintiffs and the Washington members of
15 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
16 the true nature of the pricing of the test strip products described herein.
17 1097. Defendants knew or should have known that their conduct was in violation of the
18 Washington CPA.
19 1098. Despite knowing the true nature of their products and practices for years,
21 regarding the quality and characteristics of the test strip products described herein, with the
22 intent to mislead regulators, Plaintiffs and the Washington members of the Classes, and
23 continued to engage in unfair and deceptive practices in violation of the Washington CPA.
25 misrepresentations were material to Plaintiffs and the Washington members of the Classes, and
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 251 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 260 of 274
1 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
3 1100. Plaintiffs and other Washington members of the Classes relied upon Defendants
4 material misrepresentations and omissions regarding the test strip products, as set forth above.
6 Washington members of the Classes to overpay for the test strip products. Because Defendants
7 did not reveal the true nature of the Test Strip Pricing Scheme as described herein until this
8 lawsuit was filed, the statute of limitation for filing claims against Defendants under the
9 Washington CPA did not begin to accrue until the filing of this lawsuit. Defendants either
11 1101. Plaintiffs and the Washington members of the Classes suffered injury-in-fact,
12 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
14 increased and unfair prices paid for the test strip products described herein.
16 general public, who in many cases are unable to afford or gain access to test strip products. As
17 such, Defendants unlawful acts and practices complained of herein affect the public interest.
18 1103. Pursuant to Wash. Rev. Code 19.86.090, Plaintiffs and the Washington
19 members of the Classes seek an order enjoining Defendants unfair and/or deceptive acts or
20 practices, damages, punitive damages, and attorneys fees, costs, and any other just and proper
21 relief available under the Washington CPA. Because Defendants actions were willful and
22 knowing, Plaintiffs and the Washington members of the Classes damages should be trebled. Id.
23
24
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 252 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 261 of 274
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 253 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 262 of 274
1 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
2 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
3 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
5 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
6 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
7 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
8 point.
9 1110. Defendants owed and continue to owe Plaintiffs and the West Virginia members
10 of the Classes a duty to refrain from the above-described unfair and deceptive practices and
11 disclose the true nature of the pricing of the test strip products described herein.
12 1111. Defendants knew or should have known that their conduct was in violation of the
14 1112. Despite knowing the true nature of their products and practices for years,
16 regarding the quality and characteristics of the test strip products described herein, with the
17 intent to mislead regulators, Plaintiffs and the West Virginia members of the Classes, and
18 continued to engage in unfair and deceptive practices in violation of the West Virginia CCPA.
20 misrepresentations were material to Plaintiffs and the West Virginia members of the Classes, and
21 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
23 1114. Plaintiffs and the West Virginia members of the Classes relied upon Defendants
24 material misrepresentations and omissions regarding the test strip products, as set forth above.
25 These material misrepresentations by Defendants proximately caused Plaintiffs and the West
26 Virginia members of the Classes to overpay for the test strip products. Because Defendants did
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 254 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 263 of 274
1 not reveal the true nature of the Test Strip Pricing Scheme as described herein until this lawsuit
2 was filed, the statute of limitation for filing claims against Defendants under the West Virginia
3 CCPA did not begin to accrue until the filing of this lawsuit. Defendants either concealed or
5 1115. Plaintiffs and the West Virginia members of the Classes suffered injury-in-fact,
6 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
8 increased and unfair prices paid for the test strip products described herein.
9 1116. Pursuant to W. Va. Code 46A-6-106(a), Plaintiffs and the West Virginia
10 members of the Classes seek an order enjoining Defendants unfair and/or deceptive acts or
11 practices, damages, punitive damages, and any other just and proper relief available under the
13 1117. On or about the date of this filing, certain Plaintiffs sent a letter complying with
14 W. Va. Code 46A-6-106(c). If Defendants fail to remedy their unlawful conduct within the
15 requisite time period, Plaintiffs seek all damages and relief to which Plaintiffs and the West
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 255 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 264 of 274
1 1120. Plaintiffs and the Wisconsin members of the Classes are members of the public
3 1121. Plaintiffs and Wisconsin members of the Classes are persons under the
4 Wisconsin Deceptive Trade Practices Act (Wisconsin DTPA), Wis. Stat. 100.18(1).
5 1122. Each Defendant is a person, firm, corporation or association within the meaning
7 1123. The Wisconsin DTPA makes unlawful any representation or statement of fact
9 1124. Defendants acted in violation of the Wisconsin DTPA by, at a minimum: (1)
10 making misleading statements regarding the true cost of the price of test strips or causing
11 reasonable inferences about the cost that had the tendency to mislead consumers, including but
12 not limited to publishing, setting, or distributing the list price of test strips; (2) engaging in
13 advertising concerning the role that Defendants played in setting the price paid for test strips,
14 including but not limited to marketing material averring that the PBM Defendants make efforts
15 to decrease the price of prescription drugs and/or test strips for consumers; (3) failing to disclose
16 the inflated and/or fraudulent nature of the list price(s) set and/or charged by the Manufacturer
17 Defendants for test strips; (4) making material misrepresentations regarding or failing to disclose
18 the existence, amount, and/or purpose(s) of discounts, rebates, and/or other payments offered by
19 the Manufacturer Defendants to the PBM Defendants and/or negotiated by the PBM Defendants
20 in exchange for inclusion and/or tier placement of the Manufacturer Defendants test strips on
21 the PBM Defendants formularies; (5) making material misrepresentations regarding or failing to
22 disclose the portion of discounts, rebates, and/or other payments from the Manufacturer
23 Defendants that the PBM Defendants keep; and/or (6) engaging in misleading, false, unfair
24 and/or deceptive acts or practices by selling and/or facilitating the sale of test strips at a grossly
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 256 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 265 of 274
1 1125. Defendants owed and continue to owe Plaintiffs and the Wisconsin members of
2 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
3 the true nature of the pricing of the test strip products described herein.
4 1126. Defendants knew or should have known that their conduct was in violation of the
5 Wisconsin DTPA.
6 1127. Despite knowing the true nature of their products and practices for years,
8 regarding the quality and characteristics of the test strip products described herein, with the
9 intent to mislead regulators, Plaintiffs and the Wisconsin members of the Classes, and continued
12 misrepresentations were material to Plaintiffs and the Wisconsin members of the Classes, and
13 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
15 1129. Plaintiffs and the Wisconsin members of the Classes relied upon Defendants
16 material misrepresentations and omissions regarding the test strip products, as set forth above.
18 Wisconsin members of the Classes to overpay for the test strip products described herein.
19 Because Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described
20 herein until this lawsuit was filed, the statute of limitation for filing claims against Defendants
21 under the Wisconsin DTPA did not begin to accrue until the filing of this lawsuit. Defendants
23 1130. Plaintiff and the Wisconsin members of the Classes suffered injury-in-fact,
24 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
26 increased and unfair prices paid for the test strip products described herein.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 257 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 266 of 274
2 general public, who in many cases are unable to afford or gain access to test strip products. As
3 such, Defendants unlawful acts and practices complained of herein affect the public interest.
4 1132. Plaintiffs and the Wisconsin members of the Classes seek damages, court costs
5 and attorneys fees under Wis. Stat. 100.18(11)(b)(2), and any other just and proper relief
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 258 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 267 of 274
1 particular standard, grade, style or model, if it is not; (vii) Makes false or misleading
2 statements of fact concerning the price of merchandise or the reason for, existence of, or amounts
3 of a price reduction; (x) Advertises merchandise with intent not to sell it as advertised; (xv)
5 1139. Defendants engaged in unfair and deceptive acts or practices in violation of the
6 Wyoming CPA by, at a minimum: (1) making misleading statements regarding the true cost of
7 the price of test strips or causing reasonable inferences about the cost that had the tendency to
8 mislead consumers, including but not limited to publishing, setting, or distributing the list price
9 of test strips; (2) engaging in advertising concerning the role that Defendants played in setting
10 the price paid for test strips, including but not limited to marketing material averring that the
11 PBM Defendants make efforts to decrease the price of prescription drugs and/or test strips for
12 consumers; (3) failing to disclose the inflated and/or fraudulent nature of the list price(s) set
13 and/or charged by the Manufacturer Defendants for test strips; (4) making material
15 discounts, rebates, and/or other payments offered by the Manufacturer Defendants to the PBM
16 Defendants and/or negotiated by the PBM Defendants in exchange for inclusion and/or tier
17 placement of the Manufacturer Defendants test strips on the PBM Defendants formularies; (5)
19 rebates, and/or other payments from the Manufacturer Defendants that the PBM Defendants
20 keep; and/or (6) engaging in misleading, false, unfair and/or deceptive acts or practices by selling
21 and/or facilitating the sale of test strips at a grossly inflated and/or fraudulently obtained price
22 point.
23 1140. Defendants owed and continue to owe Plaintiffs and the Wyoming members of
24 the Classes a duty to refrain from the above-described unfair and deceptive practices and disclose
25 the true nature of the pricing of the test strip products described herein.
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 259 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 268 of 274
1 1141. Defendants knew or should have known that their conduct was in violation of the
2 Wyoming CPA.
3 1142. Despite knowing the true nature of their products and practices for years,
5 regarding the quality and characteristics of the test strip products described herein, with the
6 intent to mislead regulators, Plaintiffs and the Wyoming members of the Classes, and continued
9 misrepresentations were material to Plaintiffs and the Wyoming members of the Classes, and
10 were likely to and/or did, in fact, deceive regulators and reasonable consumers, including
12 1144. Plaintiffs and other Wyoming members of the Classes relied upon Defendants
13 material misrepresentations and omissions regarding the test strips products, as set forth above.
15 Wyoming members of the Classes to overpay for the test strip products described herein.
16 Because Defendants did not reveal the true nature of the Test Strip Pricing Scheme as described
17 herein until this lawsuit was filed, the statute of limitation for filing claims against Defendants
18 under the Wyoming CPA did not begin to accrue until the filing of this lawsuit. Defendants
20 1145. Plaintiffs and the Wyoming members of the Classes suffered injury-in-fact,
21 ascertainable loss and actual damages as a direct and proximate result of Defendants unfair and
23 increased and unfair prices paid for the test strips products described herein.
25 general public, who in many cases are unable to afford or gain access to test strip products. As
26 such, Defendants unlawful acts and practices complained of herein affect the public interest.
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 260 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 269 of 274
1 1147. Pursuant to Wyo. Stat. 40-12-108(a), Plaintiffs and the Wyoming members of
2 the Classes seek damages as determined at trial, and any other just and proper relief available
3 under the Wyoming CPA, including but not limited to court costs and reasonable attorneys fees
5 1148. On or about the date of this filing, certain Plaintiffs sent a letter complying with
6 Wyo. Stat. 40-12-109. If Defendants fail to offer to cure, or fail to complete a remedy of their
7 deceptive trade acts and practices within the required time period, see Wyo. Stat. 40-12-
8 102(a)(ix), Plaintiffs seek all damages and relief available under the Wyoming CPA.
3 1155. Plaintiffs and Class members reasonably relied on Defendants deception, and
4 Defendants intended that they would so rely. Plaintiffs and Class members had no way of
5 discerning that Defendants were, in fact, deceiving them because they possessed exclusive
6 knowledge regarding the nature of diabetes test strip pricing; intentionally concealed the
7 foregoing from, Plaintiffs, the Classes and the public; and made incomplete or negligent
8 representations about the pricing of test strips and the Defendants role in that pricing, while
9 purposefully withholding material facts from Plaintiffs and the Classes that contradicted these
10 representations.
12 disregard for not only the rule of law but also public health. Indeed, as a direct result of
13 Defendants actions, access to live-saving test strips has been limited, denied, or forgone.
14 1157. Defendants owed Plaintiffs and the Classes a duty to disclose, truthfully, all the
15 facts concerning the true cost of test strips and the inflated and fraudulent nature of their pricing;
16 the existence, amount, and purpose of rebated and discounts negotiated for those products; and
17 the role that Defendants played in increasing the price of test strips.
18 1158. Defendants hatched their deceptive schemes and knew that their customers,
19 including Plaintiffs and Class members, did not know about (and could not reasonably discover)
20 the manner in which they sought to artificially inflate the price of test strips. Defendants not only
21 concealed all the facts concerning the true cost of test strips, but went further to make affirmative
23 lower the ultimate cost of prescription medications and/or test strips. Defendants engaged in this
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 262 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 271 of 274
1 1159. Plaintiffs and the Class members were not aware of the concealed and
2 misrepresented material facts referenced above, and they would not have acted as they did, had
4 1160. As a direct and proximate result of Defendants fraudulent scheme, Plaintiffs and
5 the Class members sustained damages, including but not limited to paying excessive and inflated
7 1161. Defendants are liable to Plaintiffs and the Class members for damages in an
9 oppressively, recklessly, deliberately, and with intent to defraud Plaintiffs and Class members for
10 the purpose of enriching themselves at Plaintiffs and the Class members detriment, Defendants
12 trial.
13 UNJUST ENRICHMENT
14 (By the Non-ERISA Employee/Exchange Plaintiffs
and the Uninsured Plaintiffs, Against All Defendants)
15
1162. Plaintiffs incorporate by reference each preceding paragraph as though fully set
16
forth herein.
17
1163. Plaintiffs bring this Count on behalf of themselves and the Non-ERISA
18
Employee/Exchange Plan Class and/or the Uninsured Class.
19
1164. Defendants have benefitted from selling, setting prices for and negotiating
20
discounts for test strips marketed and sold at an artificially inflated price.
21
1165. Defendants have received and retained unjust benefits from the Plaintiffs and
22
Class members, in the form of costs paid, copayments, and coinsurance payments, and inequity
23
has resulted.
24
1166. It is inequitable and unconscionable for Defendants to retain these benefits.
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 263 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 272 of 274
1 1167. Because Defendants concealed their fraud and deception, Plaintiffs and the Class
2 members were not aware of the true facts concerning Defendants efforts to inflate the cost of test
3 strips described herein and did not benefit from Defendants misconduct.
4 1168. Defendants knowingly accepted the unjust benefits of its fraudulent conduct.
6 should be disgorged and returned to Plaintiffs and Class members, in an amount to be proven at
7 trial.
10 a. Determine that this action may be maintained as a class action pursuant to Federal
11 Rules of Civil Procedure 23(a) and (b)(3), (b)(2), and/or (b)(1), and direct that
13 23(c)(2), be given to the Classes, and declare Plaintiffs as the representatives of the
14 respective Classes they seek to represent, and appoint their attorneys as Class
15 Counsel;
16 b. Enter judgments against Defendants and in favor of Plaintiffs and the Classes for
17 violations of the federal and state laws and legal standards invoked in this Complaint;
18 c. Award preliminary and permanent injunctive and other equitable relief as is necessary
19 to protect the interests of Plaintiffs and the Classes, including, inter alia, an order
20 prohibiting Defendants from engaging in the unlawful acts described above; an order
21 requiring Defendants or their agents to disclose the existence and/or amount of any
22 rebates, discounts, fees, or other payments received by the PBM Defendants for
23 including test strips on any formulary, and an order requiring Defendants or their
24 agents to disclose the true net price of test strips collected by the Manufacturer
25 Defendants;
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 264 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 273 of 274
1 d. Find that the PBM Defendants are fiduciaries and/or parties in interest as defined by
2 ERISA;
3 e. Find that the PBM Defendants violated their fiduciary duties of loyalty and prudence
5 violation of ERISA;
6 f. Award to the ERISA Plaintiffs and the ERISA Class restitution, surcharge, and/or
8 profits and unjust enrichment that Defendants obtained from the ERISA Plaintiffs and
10 g. Order other such remedial relief as may be appropriate under ERISA, including the
11 permanent removal of Defendants from any positions of trust with respect to the
12 ERISA Plans of the members of the ERISA Class and the appointment of
13 independent fiduciaries to serve in the roles the PBM Defendants occupied with
14 respect to the ERISA Plans of the ERISA Class, including as pharmacy benefit
18 i. Award Plaintiffs and the Classes damages (three times overcharges) in an amount to
19 be determined at trial;
20 j. Award Plaintiffs and the Classes their costs of suit, including reasonable attorneys
21 fees as provided by law, including under RICO, ERISA, the common fund doctrine,
23 k. Find that Defendants are jointly and severally liable for all claims;
24 l. Order that Defendants must notify each and every individual who paid a copayment
25 or coinsurance for covered prescription products that exceeded the true cost of the
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 265 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384
Case 2:17-cv-00803 Document 1 Filed 05/24/17 Page 274 of 274
1 product about the pendency of this action so that they may obtain relief from
3 m. Award such further and additional relief as the case may require and the Court may
5 X. JURY DEMAND
6 Pursuant to Federal Rule of Civil Procedure 38, Plaintiffs, on behalf of themselves and
10
13
By /s/ Derek W. Loeser
14 /s/ Gretchen S. Obrist
Derek W. Loeser, WSBA #24274
15 Gretchen S. Obrist, WSBA #37071
1201 Third Avenue, Suite 3200
16 Seattle, WA 98101-3052
Phone: (206) 623-1900
17 Fax: (206) 623-3384
[email protected]
18 [email protected]
19 Attorneys for Plaintiffs
20
21
22
23
24
25
26
K E L L E R R O H R B AC K L.L.P.
CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL 1201 Third A venue, Suite 3200
Seattle, W A 98101-3052
- 266 TELEPHONE: (206) 623-1900
FACSIMILE: (206) 623-3384