The arrangement stops pursuit of an injunction against Meds-Stat. Charlie Crist will continue with a lawsuit.
By JAMIE THOMPSON
Published October 28, 2004
A Fort Lauderdale company accused of selling flu vaccines at "unconscionable" prices reached an agreement with the state attorney general on Wednesday, promising to donate its remaining supply - about 50 shots - to the state and declining to sell any more flu vaccine in the foreseeable future.
However, the legal battle is not over.
The settlement means that Attorney General Charlie Crist has dropped his request for an injunction to stop Meds-Stat from selling the vaccine at unfair prices. But Crist vowed Wednesday to continue his lawsuit against the pharmaceutical wholesaler.
"We will aggressively pursue them," Crist said. "They were unfairly pricing something needed and necessary for sick people, and that will not be tolerated."
Crist charges a breach of the state's Deceptive and Unfair Trade Practices Act, which can carry penalties of $10,000 to $15,000 for each violation.
Meds-Stat attorneys said Wednesday the company did nothing wrong. They say they are considering legal action of their own against Crist, alleging that he failed to do his research before initiating a lawsuit they say has unfairly smeared the company's name.
"Because this was a political issue," said Meds-Stat attorney Marc Nurik, "they shot first and asked questions later."
Nurik said Meds-Stat received orders for more than 4,500 vials of Fluzone. The company could buy only 335 vials, and its average gross profit was 40.55 percent - not the 1,000 percent markup alleged by Crist, Nurik said.
He said, however, there were two instances of high markups caused by an employee mistake.
Before the shortage was announced, Nurik said, the company bought batches of vaccine at about $250 and sold them in the $300 to $400 range, a markup of 20 percent to 60 percent, respectively.
After the shortage was announced, the majority of the vials - 225 - were bought at $610 and sold at about $900, Nurik said, a markup of 47.5 percent.
However, two batches bought at the lower prices were returned to the company, and then mistakenly sold for $900 and $950, Nurik said, up to a 280 percent markup. The employee thought the batches had been purchased at the later, more expensive prices, he said.
Otherwise, the "average profit was a commercially resonable profit."
"We believe our client did nothing wrong," Nurik said, "and the attorney general's suit is totally without merit."
Crist disagrees with the company's logic. Forty percent, 200 percent, 1,000 percent - it's irrelevant, he said.
"We have a situation here where people need the flu vaccine to stay healthy, and the notion that they would want to increase it that much is unconscionable," he said. "It was wrong."
The Kansas attorney general also has sued Meds-Stat, alleging unfair vaccine prices in the face of a severe national shortage. That lawsuit is ongoing, a spokesman said Wednesday, and no settlement has been reached.
