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Lawsuit Settlement Helps Free Clinic

The Loudoun Free Clinic will be one of Virginia's clinics to receive some portion of an $830,000 settlement.

The number one expense for the Loudoun Free Clinic has always been prescriptions, and the cost is only rising. But thanks to a decision by Attorney General Jerry Kilgore, the clinic will soon have a portion of a $830,000 settlement to help defray that cost.

A class-action lawsuit by 20 states against Medco Health Solutions, the world's largest pharmaceutical benefits company, resulted in the settlement. The lawsuit alleged that Medco had been failing to pass savings onto patients after encouraging them to switch to cheaper drugs.

Because of the settlement's distribution, however, the end result of Medco's actions will mean wider availability of prescription drugs to the elderly, disabled and uninsured in Virginia. The $830,000 settlement has been divided between the Virginia Association of Free Clinics and the Virginia Primary Care Association, the statewide association for community health centers.

The remaining $417,177.69 is nearly half of what the Virginia Association of Free Clinics receives from the state each year.

"It's really a big deal for us," said Lyle Werner, executive director of the Loudoun Free Clinic. Werner met with Kilgore and got state Sen. William Mims (R-33) and Del. Joe May (R-33) involved. Both representatives sent letters to Kilgore adding their support.

"We worked very diligently and lobbied the attorney general's office," Werner said.

For the fiscal year ending June 2004, the Loudoun Free Clinic's operating budget was $391,000 — although Werner expects that to double next year because of the clinic's expanding services. Forty percent of the budget — "more than salaries," Werner noted — goes to prescription drugs.

Individual clinics won't know how much of the settlement they will receive until later this year. The amount is determined by the same formula used to dispense the annual appropriation from the state among Virginia's 49 free clinics.

MARK CRUISE, executive director of the Virginia Association Free Clinics, hopes that while this is the first settlement to benefit free clinics in Virginia, it's not the last.

Lawsuits against pharmaceutical companies settled in North Carolina first turned Cruise on to the possibility of reaping the settlement, he said.

Now, the monies garnered from a pharmaceutical company allegedly gouging its customers will help undo the damage done in the first place as the free clinics go about dispensing free drugs to elderly, disabled and uninsured Virginians.

"Attorney General Kilgore demonstrated trust in us to put this money to good use," Cruise said. "We plan to do good things with this money."

While this is the first pharmaceutical company settlement of its kind in Virginia to give back to the same industry originally involved, it's not the first time similar situations have unfolded.

"When we join these lawsuits, it's actually very common," said Tim Murtaugh, a spokesman for the attorney general's office. "Typically we try to return it to the same type of community it came from in the first place."