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United, HIV/AIDS Patients Settle Mail-Order Drug Dispute

LAW 360

Law360, Los Angeles (March 20, 2014, 4:23 PM ET) -- United Healthcare Insurance Co. has agreed to settle a proposed class action brought by consumers who suffer from HIV/AIDS and say the company’s plan forced them to obtain medications through a mail-order pharmacy in a discriminatory move, according to documents filed in California federal court on Wednesday.

The plaintiffs, who remained anonymous due to the sensitive nature of the suit, sued the nation’s largest health insurer last year, alleging that the program violates their privacy rights and state and federal statutes, including the Employee Retirement Income Security Act and the Americans with Disabilities Act. Under the proposed national settlement, United will allow patients with HIV or AIDS to opt out of a requirement that they obtain their medications by mail-order.

Jerry Flanagan, lead staff attorney for Consumer Watchdog, counsel to the plaintiffs, said patients rely on their local pharmacists who monitor potentially life-threatening adverse drug interactions and side effects.

“This settlement will bring to a close a nerve-racking episode for patients with HIV and AIDS who faced serious threats to their health and privacy,” Flanagan said Thursday. “The settlement with United creates a new national precedent for protecting vulnerable patients subject to mandatory prescription drug mail-order programs.”

Although United denies the plaintiffs’ claims and has vigorously defended the lawsuit, Wednesday’s settlement would allow patients with HIV or AIDS, who are subject to the mail-order requirement, to obtain their medications from an in-network retail pharmacy. The settlement is pending court approval.

The plaintiffs filed suit last year challenging United’s allegedly discriminatory business practices of targeting consumers who suffer from HIV or AIDS. United enrollees were told they must purchase their “specialty medications” from a mail order pharmacy of United’s choosing, its sister subsidiary OptimRx or pay thousands of dollars more each month at their local retail pharmacy, according to the complaint.

The settlement was made possible by an earlier deal in a similar lawsuit brought against Anthem Blue Cross of California, under which California Blue Cross patients with HIV/AIDS may now opt out of Anthem Blue Cross’s mail-order pharmacy program.

Unlike that settlement, according to plaintiffs’ attorneys, the proposed United deal applies to individual and employer-provided health plans across the country and allows patients to exercise their opt-out right for a broader range of medications by written opt-out, United’s website and over the phone.

“United should be commended for listening to the serious and heartfelt concerns of their customers who depend on local pharmacists for their life-saving medications,” Edith Kallas of Whatley Kallas LLC, counsel to the plaintiffs, said in a statement. “The settlement with United creates a new national precedent for protecting vulnerable patients subject to mandatory prescription drug mail-order programs.”

United said the agreement is about helping people access compassionate services that best meet their individual needs.

"Both sides worked hard to resolve this matter and today’s settlement ensures that members have continued access to needed prescriptions, as well as specialized support services that improve health outcomes,” a United spokesman told Law360 on Thursday.

Plaintiffs are represented by Edith M. Kallas and Alan M. Mansfield of Whatley Kallas LLP and by Consumer Watchdog.

Defendants are represented by Dean Hansell and Peter R. Bisio of Hogan Lovell US LLP.

The case is John Doe et al. v. United Healthcare Insurance Co. et al., case number8:13-cv-00864, in the United States District Court for the Central District of California, Southern Division.

--Editing by Richard McVay.