The claims administration concluded in March 2024. On March 28, 2024 Lead Counsel filed a Motion for Approval of Distribution Plan seeking the Court’s permission to distribute the net settlement fund to Court-approved eligible claimants. On October 22, 2024, the Court granted permission for the net settlement fund to be distributed. The distribution of funds will occur within 4 – 6 weeks.
Two settlements providing for a total cash payment of $23.125 million have been proposed in a class action lawsuit brought on behalf of Third-Party Payors (“TPPs”) who paid or incurred costs for Valeant-branded drugs from January 2, 2013 through November 9, 2015, that were purchased through Philidor Rx Services, LLC (“Philidor”) or any pharmacy in which Philidor had a direct or indirect ownership interest.
The lawsuit, called In re Valeant Pharmaceuticals International, Inc. Third-Party Payor Litigation, Civil Action No. 16-3087-(MAS)(LHG), is pending in the United States District Court for the District of New Jersey (the “Court”). Plaintiffs in the lawsuit allege that Valeant Pharmaceuticals International, Inc. (“Valeant”), Philidor, and other Defendants violated the Racketeer Influenced and Corrupt Organizations Act by causing Third-Party Payors to pay artificially inflated prices for Valeant drugs as a result of a fraudulent scheme in which Valeant secretly controlled a captive pharmacy network through Philidor.
WHAT DO THE SETTLEMENTS PROVIDE?
The proposed settlements provide a total cash payment of $23.125 million. Plaintiffs have reached a proposed settlement with Valeant for $23 million (the “Valeant Settlement”) and a proposed settlement with Philidor, Andrew Davenport, and the Estate of Matthew S. Davenport for $125,000 (the “Philidor Defendants Settlement” and, with the Valeant Settlement, the “Settlements”).
The combined Settlement Amounts, plus interest earned, are known as the “Settlement Funds.” The Net Settlement Funds (i.e., the Settlement Funds less: (i) any Taxes; (ii) any Notice and Administration Costs; (iii) any Litigation Expenses and service awards for Plaintiffs awarded by the Court; (iv) any attorneys’ fees awarded by the Court; and (v) any other costs or fees approved by the Court) will be distributed to eligible claimants in accordance with a plan of allocation to be approved by the Court.
WHO IS INCLUDED IN THE SETTLEMENT CLASS?
The Settlement Class includes all health insurance companies, health maintenance organizations, self-funded health and welfare benefit plans, other Third-Party Payors, and any other health benefit provider in the United States of America or its territories that paid or incurred costs for Valeant’s branded drug products in connection with a claim submitted by Philidor, a claim submitted by any pharmacy in which Philidor had a direct or indirect ownership interest, or a claim by any pharmacy for which the amount sought for reimbursement was alleged to be inflated as a result of Defendants’ allegedly fraudulent scheme, from January 2, 2013 through November 9, 2015, and allegedly suffered damages thereby.
A Third-Party Payor (or “TPP”) is an entity in the United States of America or its territories that was (i) a party to a contract, issuer of a policy, or sponsor of a plan; and (ii) at risk, under such contract, policy, or plan, to pay or reimburse all or part of the cost of prescription drugs dispensed to covered natural persons. TPPs include insurance companies, union health and welfare benefit plans, and self-insured employers. Entities with self-funded plans that contract with a health insurance company or other entity to serve as a third-party claims administrator to administer their prescription drug benefits qualify as TPPs. Private plans that cover government employees and/or retirees are also included.
Excluded from the Settlement Class are Pharmacy Benefit Managers, Defendants, Defendants’ successors and assigns, and any entity in which any Defendant has or had a controlling interest. Also excluded from the Settlement Class are any entities that properly submitted a Request for Exclusion from the Settlement Class.
SETTLEMENT HEARING
A Settlement Hearing to consider final approval of the Settlements, the proposed Plan of Allocation, and Lead Counsel’s motion for attorneys’ fees and expenses was held on December 2, 2021. On December 6, 2021, the Court-appointed Special Master, the Honorable Dennis M. Cavanaugh (Ret.), entered a Report and Recommendation which recommended granting final approval to the Settlements and approving the motion for attorneys’ fees and expenses.
On February 22, 2022, the Court entered a Memorandum Opinion and an Order that adopted the Special Master’s Report and Recommendation, granted final approval to both Settlements and the Plan of Allocation, and approved the motion for attorneys’ fees and expenses.