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A Philadelphia judge has certified as a nationwide class all third-party payors that had to refund beneficiaries or insureds for purchases of the cholesterol reducer Baycol, which Pittsburgh-based Bayer Corp. voluntarily removed from the market in 2001. Named as class representatives by Philadelphia Common Pleas Judge Mark I. Bernstein in his opinion in In re Pennsylvania Baycol Third-Party Payor Litigation were the health funds from three area union locals: Philadelphia Firefighters Local 22, AFL-CIO District Council 47 and the National Conference of Firemen and Oilers Local 1201. Class counsel said that they believe there are at least 10,000 third-party payors across the country who could eventually become members of the class and that they expect the class to also include insurers and employer benefits plans, in addition to union local health funds. “To my knowledge, this is one of the first class actions that has been certified for third-party payors — such as health and welfare funds — in the United States,” said class co-counsel Stewart Cohen of Kessler Cohen & Roth in Philadelphia, who is working on the case with William Marvin of the same firm. “This is a very significant victory for health and welfare funds, because really the only way that they have to try to collect this money from the drug companies is to get together.” Other class counsel include Steven Schwartz, Morris Shuster and Daniel Scott of Chimicles & Tikellis in Haverford; Ira Schochet of Goodkind Labaton Rudoff & Sucharow in New York; and Ellen Meriwether of Miller Faucher & Cafferty in Philadelphia. Representing Bayer in the matter are attorneys from Eckert Seamans Cherin & Mellott in Philadelphia. Bayer spokeswoman Andrea Calise said Bayer is considering appealing Bernstein’s certification.”Bayer disagrees with the ruling,” Calise said. “Bayer opposes certification of any class action for Baycol; the company believes that certification in any class is not appropriate.” She noted that Bernstein’s certification ruling does not infer liability. According to Bernstein’s opinion, Baycol — also known as Cerivastatin — was approved for sale by the FDA in June 1997 and used by roughly 700,000 consumers before being taken off the market in August 2001. The class representatives have filed claims for breach of warranty and unjust enrichment. “Defendant has refused and continues to refuse to refund [third-party payors] the purchase price paid for Baycol rendered unusable by defendant’s voluntary actions and advice,” Bernstein wrote. “Defendant has refused and continues to refuse to refund [third-party payors] for increased costs rendered medically necessary in order to safely switch patients to a different medication.” Bernstein concluded that the proposed class had satisfied the five prerequisites for certification under Pennsylvania Rule of Civil Procedure 1702: numerosity, commonality, typicality, adequacy of representation and fair and efficient method of adjudication. Bernstein devoted the bulk of his Rule 1702 analysis to Bayer’s arguments as to commonality.He rejected the contention that applying Pennsylvania law to claims arising from funds or insurers in other states is improper. “Defendants maintain their principal places of business in Pennsylvania,” Bernstein wrote. “They directed and controlled their national sales strategies with regard to [third-party payors] from within Pennsylvania. Their refund policy [regarding unused Baycol] was designed or coordinated within Pennsylvania.” Bernstein ordered that proposals for a class-notification procedure be submitted to him within the next month. Cohen and Marvin said they have not yet formulated a complete notification plan with their fellow class counsel. Deborah Datte, a partner in Post & Schell’s health law group, said that it is uncommon for third-party payors to be certified as a class, and that she has never seen a nationwide class of third-party payors.

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