Nonprofit foundation sues pharmaceutical giant in California

On Behalf of | Sep 12, 2013 | Firm News |

Southern California business owners know how difficult it can be to compete with a billion-dollar company. Taking legal action can be just as challenging. But that shouldn’t prevent smaller businesses from doing what must be done. The same is true for nonprofits, who may not feel they stand a chance against a giant corporation that has engaged in unfair competition or breached a contract. If laws have been broken, the larger company must be held responsible. 

That’s the contention of the AIDS Healthcare Foundation, which has filed a lawsuit against pharmaceutical giant GlaxoSmithKline in California Superior Court. The foundation, which provides health care services for AIDS patients in dozens of countries, accuses GSK of failing to offer its drugs at a lower price as mandated by a federal drug discount program. It also alleges that once the foundation discovered it was paying too much for the drugs, GSK refused to reimburse it for the overpayments. The nonprofit is suing GSK for breach of contract, unfair competition and unjust enrichment, among other charges.

The AIDS Healthcare Foundation was eligible to receive the drugs at a discounted price under the federal 340B Program, which allows nonprofit health care foundations to make better use of very limited federal resources. The drugs that AHF dispenses help keep countless AIDS and HIV patients alive, according to its president. 

Between 2005 and 2013, GSK failed to offer drugs for these patients at a discounted price. Once the error was discovered, AHF attempted to remedy the problem by demanding that GSK reimburse the foundation for the $2 million in losses. After the pharmaceutical company refused to comply the foundation filed its lawsuit, calling GSK’s refusal to extend discounts that are legally required “intolerable.”

Businesses and nonprofit organizations that provide such important goods and services shouldn’t have to endure wrongdoing by another, possibly larger company. With the law and a qualified business litigation attorney on their side, justice is always within reach. 

Source: Herald Online, “AHF: GSK Sued for Cheating on Pricing of Aids Drugs,” Sept. 10, 2013

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