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Schenectady County may join generic drug price lawsuit

Schenectady County may join generic drug price lawsuit

County believes it may be overcharged for generic drugs
Schenectady County may join generic drug price lawsuit
Photographer: Gazette file photo

SCHENECTADY COUNTY -- Schenectady County legislators are preparing to join other municipal governments in suing the makers of generic drugs over alleged price-fixing.

The County Legislature will vote Tuesday on a resolution authorizing County Attorney Chris Gardner to enter into an agreement with Napoli Shkolnik PLLC, a New York City law firm already working on a case with the New York State Association of Counties and other counties.

The proposal was approved at the committee level Monday night, making approval on Tuesday a near-certainty.

"It is important to ensure that there is competition within the generic drug market to reduce drug costs and save our taxpayers money," said Legislature Chairman Anthony Jasenski, D-Rotterdam.

Like many New York counties, Schenectady self-insures for employee drug coverage, meaning it pays for employee prescription drugs directly from the county treasury. In 2018, Gardner said, the county spent $4,585,149 on prescription drugs, covering about 2,780 people -- employees, their families and some retirees -- in an average month.

He said $942,826 of drug spending last year was on generics, and this year through May the county has already spent more than $482,000 on generics -- and the average cost per generic prescription is up 16 percent.

"We may be a little ahead of the curve here, but it's going up," Gardner said. "The generic side really should be almost a perfect model of competition, with lots of competition."

The U.S. Department of Justice and many state attorneys general are investigating if generic drug manufacturers are engaged in price-fixing, bid-rigging and other possible anti-trust violations. On May 20, state attorneys general filed a federal lawsuit in Connecticut against 21 drug companies, involving 116 different generic drugs. New York is one of the states participating in that lawsuit.

Separately, three New York counties are already working with Napoli Shkolnik on a lawsuit likely to be heard in federal court in eastern Pennsylvania, and the state Association of Counties last month circulated a memo suggesting other counties consider joining the effort.

"To the extent your county purchases directly or reimburses for the cost of such generic drugs, you may have standing to seek legal recourse for this wrong-doing," NYSAC Executive Director Stephen Acquario wrote.

Gardner said it's impossible to estimate how much the county might recover, but he noted that a similar lawsuit involving high prices charged for name-brand drugs resulted in the county being reimbursed nearly $294,000 for the years 2008-2015.

“The industry is bound to be colluding in a way that hampers our fiscal responsibility," said County Legislator Gary E. Hughes, D-Schenectady.

Officials said there will be no upfront cost to the county, with the law firm receiving a share of any settlement or verdict against drug companies.

In a different lawsuit filed in 2017 and still pending, the county joined with other counties seeking reimbursement from drug companies for costs incurred due to the current opioid abuse epidemic.

Also Tuesday, the Legislature will vote on approving $81,000 in funding to construct a Vietnam War veterans memorial along the Hudson-Mohawk Bike Path near SUNY-Schenectady County Community College. The proposed site is near where the trail starts heading west into Rotterdam, with a view of the Mohawk River.

The planned monument would feature a four-foot-high granite memorial with a 25-foot flag pole. County Engineer Paul Shelton said it will take four or five months to construct.

“I think this is a wonderful opportunity for us to honor the Schenectady County residents who served during the Vietnam War, and maybe did not receive the respect they deserved when they returned," said Legislator Holly Vellano, C-Rotterdam, chairwoman of the Committee on Environmental Conservation, Renewable Energy and Parks.

Reach Gazette reporter Stephen Williams at 518-395-3086, [email protected] or @gazettesteve on Twitter.

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