The Synthroid Class Action Lawsuit Settlement

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If you take the thyroid hormone replacement drug Synthroid, you may hear about a class action lawsuit that was filed against the drug's manufacturer Knoll Pharmaceuticals, and parent company BASF, in the late 1990s. That lawsuit has been settled, but it's important to know about it, as part of the history of this top-selling brand-named levothyroxine drug.

Some History

In the 1990s, Synthroid was manufactured by Knoll Pharmaceuticals. Synthroid had a reported 85 percent of the market for levothyroxine as of 1997. Synthroid was consistently priced well above its competitors, and drug sales representatives and marketing literature claimed that the higher price was appropriate as the drug was better than its competitors. The company set out to prove this with research and commissioned a study to show that Synthroid was in fact clinically better than other brand-name and generic levothyroxine drugs.

The study, conducted by Betty Dong, MD, found that Synthroid was equivalent, but not superior, to competitive levothyroxine drugs. At that point, Knoll pulled the study and prevented publication of the results in medical journals. Over the objections of Knoll, Dr. Dong eventually had the study published

After publication of Dr. Dong's research, class action lawsuits were filed on behalf of consumers who believed they were misled to pay more for Synthroid. The class action was settled in 2000, and final payments to consumers were made in 2003. (Note: Consumers who did not file at that time cannot recover money.)

Basis of the Class Action Lawsuit

The lawsuit resulted from an investigation, which began in 1996, that alleged that Knoll Pharmaceuticals and parent company BASF was violating consumer protection laws by attempting to prevent publication of the results of Dr. Dong's research study, which clearly demonstrated that generic and competitive brand name levothyroxine drugs were equivalent to the Synthroid brand in terms of effectiveness and safety for thyroid patients.

Dr. Dong told the Journal of the American Medical Association that the study had been suppressed for six years by the drug company. Knoll had also considered suing the publication to stop the publication of the study.

The suit alleged that the defendants concealed or suppressed information about the cheaper bioequivalent brand name and generic levothyroxine drugs, falsely represented that there were no equivalents to Synthroid, and therefore charged consumers more than they would have had to spend if they knew there were less expensive alternatives.

Synthroid Class Action Lawsuit Settlement

The initial suits against Knoll were for valued at up to $8.5 billion. At that time in 2000, the market for levothyroxine was estimated at $600 million per year. The settlement, however, was made for far less than the litigants sought.

On Tuesday, August 8, 2000, Knoll Pharmaceutical Company announced that Judge Elaine Bucklo of the U.S. District Court for the Northern District of Illinois gave final approval of a settlement of the Synthroid class action lawsuit.

The proceeds from an escrow account, which as of June 30, 2000, contained approximately $91 million plus interest (fewer attorneys' fees and costs) were designated to be paid to consumers who had filed as part of the lawsuit and agreed to release all claims against Knoll. A total amount of approximately $46 million plus interest (fewer attorneys' fees and costs) was to be paid to third-party payer class members.

At the time, Knoll estimated that 778,000 consumers would receive payments of about $111 each if they began taking Synthroid before January 1, 1995, and about $74 each if they began taking Synthroid after January 1, 1995. payments were supposed to be sent before the end of 2000 if no appeals were filed. Appeals were filed, however, and the settlements were further delayed.

In the end, checks were finally sent to patients in the fall of 2003. At that time, the website dedicated to providing information about the lawsuit and settlement was decommissioned and taken off-line.

A Word from Verywell

The lawsuit against Synthroid's manufacturer Knoll Pharmaceuticals and parent company BASF was never about the safety or efficacy of Synthroid. The drug was always considered safe and effective. The lawsuit challenged the marketing claims that Synthroid-brand levothyroxine was clinically superior to other brands of levothyroxine, and the fact that the company had charged more for Synthroid based on that false premise.  

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