Firm settles isle drug
recycling lawsuit

An AmerisourceBergen unit
would pay $3.2 million to
settle a class-action lawsuit

A national drug distribution firm agreed yesterday to a tentative $3.2 million settlement of a class-action lawsuit accusing it of selling recycled drugs in Hawaii.

The lawsuit, which was granted class-action status in September 2003, alleged that during the 1990s IPC Pharmacy, owned by Pennsylvania-based AmerisourceBergen Corp., accepted pills returned by nursing homes and recycled them by returning them to bulk container bottles or by relabeling them.

The law in Hawaii has since been changed to permit the use of returned medication under more stringent guidelines designed to protect patients from getting medication that has been opened or previously dispensed.

While there were no allegations of physical harm to any patient, attorneys for the class estimate 5,000 people in Hawaii were affected, including many who live in nursing and care homes.

Under the terms of the settlement, PharMerica Inc., a subsidiary of AmerisourceBergen, will pay $2 million to a fund for the class and $1.2 million to the University of Hawaii for programs benefiting senior citizens. Any unclaimed money in the class fund also will be distributed to UH. The settlement will not become final until the court approves the terms.

The $2 million will be available to pay consumers who purchased drugs from IPC Pharmacy between 1997 and 2000, said Rick Eichor, an attorney for the class.

"A principal part of the settlement is the payment of monies to seniors, their spouses or financial guarantors for medication that was alleged to be recycled," Eichor said. "We think that the settlement is an important development in protecting seniors in Hawaii."

Most of the members of the class will receive awards of about $400 to $500, said Thomas Grande, another attorney for the class. Patients who had claims prior to 1997, when record keeping was poor, will receive $100 awards, he said.

Since many of the seniors represented in the class have died, the bulk of the money for payment to earlier class members -- $1.2 million -- will fund UH programs that benefit senior citizens, Grande said.

"We believe this is the best way to ensure that substantial benefit is given to our senior population," he said.

The settlement is of great benefit to Hawaii's senior citizen community and to the University of Hawaii, said Frank Markham, who pursued the case on behalf of his deceased sister, Eleanor Wallwork.

"I'm very pleased that Hawaii seniors are getting back the money that they paid for these drug purchases," Markham said.