Commonwealth v. Tap Pharmaceutical Products, Inc.

OPINION re POST-TRIAL MOTIONS of the COMMONWEALTH of PENNSYLVANIA and BRISTOL-MYERS SQUIBB COMPANY

OPINION BY

Judge SIMPSON.

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I. BACKGROUND

A. Opening

This complex original jurisdiction action, which comes before a panel of this Court for a third time, involves the pricing of pharmaceuticals reimbursed by the Pennsylvania Department of Public Welfare (DPW), which administers Pennsylvania’s Medicaid program, and by the Department of Aging, which administers the Pharmaceutical Assistance Contract for the Elderly (PACE) program, based on Average Wholesale Price (AWP) between 1991 and 2008.

In particular, the Commonwealth, through its Attorney General, filed suit against numerous pharmaceutical companies, including defendant Bristol-Myers Squibb Co. (BMS), which, the Commonwealth claimed, engaged in improper conduct that caused DPW and PACE (collectively, “Plaintiff Agencies”) to pay inflated prices for pharmaceuticals the defendant pharmaceutical companies manufactured, marketed and sold. Among other things, the Commonwealth alleged the defendant pharmaceutical companies, including BMS, reported or contributed to the reporting of inflated AWPs for certain specified drugs that are published in commercial publications and that these inflated prices caused overpayment by DPW and PACE, which relied on these reported prices.

Central among the Commonwealth’s claims is that the published AWPs for BMS’ drugs are fictitious because they do not reflect an accurate average wholesale price charged by wholesalers to providers,

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including physicians and pharmacists. Because AWP was the predominant benchmark for reimbursement by government and third-party payors, including DPW and PACE, the Commonwealth asserted BMS and other pharmaceutical companies inflated or contributed to the inflation of each drug’s AWP to create a “spread” between a provider’s actual acquisition cost and the fictitious, published AWP, and that pharmaceutical companies, including BMS, market this spread in order to gain market share over a competitor’s drug.

The Commonwealth’s suit against Defendant BMS, which asserted claims of common law fraud or misrepresentation and civil conspiracy, as well as violations of the Unfair Trade Practices and Consumer Protection Law (CPL),

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culminated in a five-week jury trial. After the close of evidence, issues relating to the Commonwealth’s claims of fraud or misrepresentation and civil conspiracy were submitted to the jury, while issues relating to the statutory claims were submitted to the trial judge for non-jury decision.

Ultimately, the jury returned a verdict in favor of BMS on the common law claims. Shortly thereafter, the trial judge issued a Decision Awarding Injunction and Restoration (Decision) against BMS, finding that BMS violated the CPL. As to the remedy for the CPL violations, the Decision provided for injunctive relief, which essentially restrains BMS from contributing to the reporting of inflated AWPs for its drugs and from creating, marketing or promoting the spread for its drugs. In addition, the trial judge ordered BMS to restore to the Commonwealth the amount of $27,617,952.

Both the Commonwealth and BMS filed post-trial motions. For its part, the Commonwealth seeks judgment

non obstante veredicto

(JNOV) or, alternatively, a new trial on its negligent misrepresentation and civil conspiracy claims as well as modification of the trial judge’s Decision on its statutory claims, to provide for relief in addition to that granted by the trial judge.

On the other hand, BMS challenges the Court’s determinations that it violated the CPL. It therefore requests the Court vacate its Decision awarding injunctive relief and restoration.

For the following reasons, we deny the Commonwealth’s post-trial motions. In addition, we decline BMS’ request to vacate the award of injunctive relief and restoration; however, as explained more fully below, we modify the injunction.

B. History

1. Average Wholesale Price— Origin & Evolution

The AWP-based system for drug reimbursement is inherently a complicated system in which “average wholesale price” or “AWP” is the cornerstone of a larger pricing infrastructure.

Since the late 1960s, nearly every branded prescription drug sold in the United States has an AWP, which is published in commercial pricing compendia like Red Book, First DataBank, and Medispan.

See In re Pharm. Indus. Average Wholesale Price Litig.,

491 F.Supp.2d 20 (D.Mass.2007), aff

'd,

582 F.3d 156 (1st Cir.2009),

cert. dismissed sub. nom., AstraZeneca Pharm. LP v. Blue Cross Blue Shield of Massachusetts,

— U.S. -, 131 S.Ct. 60 , 177 L.Ed.2d 1150 (2010)

(MDL 2007).

During the period covered by this lawsuit, AWP is provided in a current, digital format for each available branded pharmaceutical, in each dosage and packaging size. The digital format and the constantly updated value facilitate use in the computer-dominated reimbursement systems,

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such as those used by the Plaintiff Agencies. -See BMS Trial, Notes of Testimony (N.T.), 8/24/10, at 1903-04 (Thomas Sned-den, Director of PACE); 2020 (Dr. Terri Cathers, Director of Pharmacy for the Fee-for-Service Program of DPWs Office of Medical Assistance Programs).

The federal government used AWP as the pricing benchmark for Medicare reimbursement until the 2005 effective date of the Medicare Prescription Drug, Improvement & Modernization Act of 2003.

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MDL 2007.

By statute and regulation, it has also been the pricing benchmark used by the Plaintiff Agencies for Medicare Part B and Medicaid drug reimbursements.

Neither the federal government’s Centers for Medicare and Medicaid Services (CMS) (and its predecessor, the Healthcare Finance Administration, also known as HCFA), nor the Plaintiff Agencies regulate or set the AWPs; rather, they entrusted the pharmaceutical companies with the task of reporting the AWPs accurately to the publications.

Id.

Initially, AWP was, in fact, the average price charged by wholesalers to providers, like doctors and pharmacies. N.T., 8/16/10, at 673-75. It was derived from the markup charged by wholesalers over their actual acquisition cost, sometimes called the “wholesale acquisition cost” or “WAC.”

Id.

at 675. However, the market evolved.

In general, and on the specific topic of evolution of the AWP-based pricing system, the trial judge accepted the testimony of the Commonwealth’s expert witness on liability and causation, Dr. William Coma-nor, currently Professor of Economics at UC Santa Barbara, and Professor of Health Services at UCLA, and Director of the research program of pharmaceutical economics and policy at UCLA.

Dr. Comanor testified WAC (or in BMS’ case, “Wholesale List Price,” or WLP) is a conventional term that signifies the price paid by the wholesalers before discounts. N.T., 8/16/10, at 672. In contrast, the AWP is the average wholesale price, which is the basis under which most reimbursement payments are made to pharmacies and other providers.

Id.

at 682.

Originally, the AWP was 20-25% higher than the WAC/WLP because that reflected the typical costs at the outset of the distribution process of pharmaceuticals.

Id.

at 675-76. However, competition and improved efficiency forced wholesale prices to decrease.

Id.

at 676. Eventually, the markup was eliminated in the market, so that prices paid to wholesalers approached WAC/WLP values.

Id.

BMS often sold its branded drugs to wholesalers at WLP less 2%, reflecting a prompt pay discount. N.T., 8/19/10, at 1370 (Zoltán Szabo, BMS’ Vice President of Global Pricing). In addition, through various arrangements with wholesalers, BMS offered high volume purchasers, such as Group Purchasing Organizations (GPOs), significant discounts off the WLPs for its drugs.

Id.

at 1380-85. BMS also offered substantial discounts below its WLPs to long term care pharmacies such as Omnicare, resulting in higher volume sales of BMS drugs, and, as a direct result, an increased market share for BMS.

Id.

at 762, 764-770; PX-8962; PX-8963.

It is undisputed that wholesalers’ profit margins were very thin or nonexistent. N.T., 8/19/10, at 676 (Comanor) (“there’s essentially no difference between the manufacturer’s price and the wholesaler’s price because of the improved efficiency of the wholesaler.”) From all these circumstances the trial judge inferred that an actual average of wholesale prices for

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BMS branded drugs was below WAC/ WLP. Evidence to the contrary was rejected, and the trial judge declined to draw inferences favorable to BMS.

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Despite the greatly reduced prices in sales from wholesalers to pharmacies, BMS and manufacturers of other branded drugs did not change the process for determining and reporting AWP.

Id.

at 678. Indeed, pharmaceutical manufacturers, including BMS, understood the AWPs for their branded drugs would be subject to a markup of approximately 25 percent over their reported WACs/WLPs.

Id.

at 678; 688-86. Thus, despite market changes, the AWPs continued to be set equal to the WAC/WLP plus an established markup.

Id.

In other words, although the market changed, the mechanism by which AWPs were set did not change, so there became an increasing disconnect between reality and price-setting.

Id.

at 680-81. In reality, AWP “was not the actual price that [a] pharmacist purchased the drug.” N.T., 8/26/10, at 2421 (Love). This resulted in AWP being a “fictitious number.” N.T., 8/24/10, at 2072 (Cathers).

The trial judge found no believable evidence that any Pennsylvania pharmacy or physician ever paid full AWP to acquire BMS branded drugs. Nevertheless, for years the Plaintiff Agencies reimbursed Pennsylvania pharmacies and other providers at full AWP for BMS branded drugs. Gradually, the Plaintiff Agencies were able to convince other parties involved in setting reimbursement rates to lower rates to reflect discounts off AWP. Only recently was DPW able to escape an AWP-dominated reimbursement regime.

BMS recognized that AWPs were “the legacy of a distribution system which ceased to exist in the early 1980s,” and were previously used to represent the price at which wholesalers sold drugs to pharmacies and physicians. PX-491. BMS also understood that AWPs continue to play a pivotal role in the overall prescription drug pricing and reimbursement systems.

Id.

BMS further understood the high costs of reimbursement for prescription drugs by public payors placed pressure on state budgets.

See

PX-548; PX-580.

In addition, BMS recognized that general confusion existed over AWP.

See

PX-491 (“The media often refers to AWP as the cost of the drug. Generally implying that this is the amount that manufacturers charge.”) Indeed, at times there was confusion among BMS executives and employees regarding AWP.

See, e.g.,

N.T., 8/19/10, at 1418, 1460-62 (testimony of Rose Crane, former BMS President of U.S. Primary Care, regarding her belief that AWP was a price paid by wholesalers); N.T., 8/11/10, at 824 (testimony of Paul Norris, BMS’ Regional Business Director for the Northeast Region, Oncology Division, that some BMS employees within the global marketing organization believed AWP was “representative of the price that we sold the product.”)

Further, while the testimony of DPW and PACE witnesses reveals they had some knowledge that AWP represented a flawed reimbursement benchmark, their testimony also showed they did not definitively understand the extent of the inaccuracy as it pertained to the BMS branded drugs at issue here. These witnesses never testified they knew WAC/WLP represented a price that providers actually paid for BMS drugs and, in any event, there was evidence that providers paid less than

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WAC/WLP. The testimony of DPW and PACE witnesses shows that although they knew problems existed within the existing AWP system, substantial confusion existed, and they lacked an awareness of an actual average of wholesale prices for BMS branded drugs. More importantly, DPW and PACE witnesses did not have an accurate estimate of acquisition costs in a format suitable for calculating the tens of thousands of claims they receive each day.

Also, BMS emphasized it reported WLPs for its branded drugs to the pricing compendia, rather than AWPs, and sought to distinguish itself in that regard from the conduct of other defendant pharmaceutical manufacturers who reported AWPs; nevertheless, BMS understood, expected and intended that the pricing compendia would apply a standard markup to its WLPs to derive an AWP.

See

N.T., 8/19/10, at 1374-76, 1385-86 (Szabo); N.T., 8/17/10, at 1019-20 (Douglas Soule, Senior Territory Representative for BMS); PX-491; N.T., 8/11/10, at 158-162, 170-71, 173, 189-92, 194-95, 198-99, 218-19, 220-21, PX-133, PX-487, PX-478, PX-474, PX-476 (Denise Kaszuba, BMS Senior Pricing Analyst/Associate Manager of Pricing Support); N.T., 8/11/10, at 247-49 (Norris); N.T., 8/16/10, at 678 (Comanor).

2. Plaintiff Agencies

As noted above, the Commonwealth, through its Attorney General, filed this action on behalf of DPW and PACE.

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A brief description of the roles of the Plaintiff Agencies is helpful.

a. DPW/Pennsylvania Medicaid

DPW administers Pennsylvania’s Medicaid program. Medicaid is a joint state-federal funded program for medical assistance in which the federal government approves a state plan for the funding of medical services for the needy and then subsidizes a significant portion of the financial obligations the state has agreed to assume.

See

N.T., 8/24/10, at 2017, 2021;

Eastwood Nursing & Rehab. Ctr. v. Dep’t of Pub. Welfare,

910 A.2d 134 (Pa.Cmwlth.2006). Once a state voluntarily chooses to participate in Medicaid, the state must comply with the requirements of Title XIX of the Social Security Act, 42 U.S.C. §§ 1396-1396 (q), and applicable regulations.

Eastwood Nursing.

According to Dr. Terri Cathers, who testified as designee for DPW, and who serves as the Director of Pharmacy for the Fee-for-Service Program of DPWs Office of Medical Assistance Programs:

Medicaid covers the poorest of the poor in Pennsylvania and the sickest of the sick. Roughly today two-thirds are children. Many of those children are either very poor or very ill. We cover the blind, the disabled. And it’s at a hundred percent of the federal poverty level, so these people are very poor and desperately need good quality health care coverage and pharmacy benefits, and that’s what the Medicaid program provides.

N.T., 8/24/10, at 2017.

With regard to prescription reimbursement, Pennsylvania Medicaid processes roughly 30,000 claims per

day,

which are submitted electronically. The Medicaid fee-for-service program covers approximately 25,000 national drug codes (NDCs).

Pennsylvania Medicaid benefits are delivered through two systems: the “fee-for-service” system and the managed care system. In Pennsylvania, 42 counties operate under the fee-for-service program. These

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counties are located in the center and the northern tier of the state (configured in a “T” formation). The fee-for-service program reimburses providers on a “claim-by-claim” basis.” N.T. 8/24/10, at 2032.

Pennsylvania’s lower southeast and southwest regions are known as “mandatory managed care” zones; nine managed care organizations (MCOs) contract with DPW to provide Medicaid benefits and services.

Id.

DPW reimburses these MCOs on a monthly, fixed fee basis per recipient.

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DPW reimburses drug providers, like pharmacies, at the lesser of estimated acquisition cost, which is DPW’s best estimate of the rate that ensures access to the provider, or a “usual and customary” charge, which is the amount a pharmacy would submit or charge a cash-paying customer.

The “baseline” for DPW reimbursement is AWP, which is listed in the national pricing compendia, including First DataBank, Red Book and Medispan. The national pricing compendia receive their data from drug manufacturers.

Id.

at 2022 .

The reimbursed formula for Medicaid is fixed by state regulation. Between 1991 and 1995, DPW reimbursed providers at 100% of AWP. From 1996 through 2004, DPW reimbursed providers at a rate of AWP-10%.

Id.

at 2025-26 .

b. Department of Aging/P ACE

PACE provides a comprehensive, prescription drug benefit to qualified, older Pennsylvania residents throughout all of the state’s 67 counties. PACE is available to Pennsylvania residents, aged 65 or older, with limited incomes. PACE eligibility requirements are based on income, residency and age.

PACE is funded through revenue generated by the Pennsylvania Lottery. PACE has an annual budget that exceeds $200 million, approximately 96-97% of which is used to pay for prescription drugs for its beneficiaries.

Thomas Snedden, who has served as the Director of PACE for over 25 years, gave partly credible testimony as to the program. He believably explained the typical PACE beneficiary is a 78-year-old, widowed female who lives alone in a private residence, who has less than a 10th grade education, who has four or five different disease states, and who takes five or six prescription medications daily.

PACE reimburses providers for a drug’s ingredient cost and a dispensing fee. When a pharmacy fills a PACE beneficiary’s prescription, it collects a small co-payment from the beneficiary and bills PACE, which, in turn, reimburses the pharmacy for the balance of the prescription price.

Because of the complex administration of the PACE program, claims are handled and processed electronically. To that end, Snedden credibly explained:

[0]ur foremost concern with the PACE program is [to] make sure that people don’t get medications that are inappropriate for them, that the dose might be too high, the duration too long, the mix of medications could cause them to be hospitalized. So the pharmacy, when the prescriptions are presented, they have to be input by the pharmacist into a computer, which comes into the PACE main frame, where they are scanned and checked to ensure that there won’t be any drug misadventure. All of that happens within about one second from the

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time the pharmacist inputs prescriptions. There’s just no practical way you could do that in a paper environment.

N.T., 8/24/10, at 1903.

Approximately 300 drug companies have participated in the PACE program, and PACE covers roughly 30,000 drugs.

PACE’S reimbursement formula is fixed by statute. AWP is the “price basis” upon which PACE reimburses pharmacies. N.T., 8/24/10, at 1913. PACE initially reimbursed providers at 100% of AWP. After 12 years of reimbursing providers at 100% of AWP, the statutory reimbursement rate changed to AWP-10%. In 2003, PACE’S reimbursement formula changed to AWP-12%. PACE uses the pricing publication Red Book.

3. BMS

Defendant BMS is a Delaware corporation engaged in the business of manufacturing, distributing, marketing and selling brand-name pharmaceutical drugs.

The specific BMS branded drugs at issue in this case are: Etopophos, Vepesid, Avapro, Blenoxane, Buspar, Cefzil, Coum-adin, Cytoxan, Glucophage, Monopril, Monopril HCT, Paraplatin, Plavix, Prava-chol, Rubex, Serzone, Sustiva, Taxol, Te-quin, Videx, Zerit, and Ability.

Most of the claims by the Plaintiff Agencies involve self-administered branded drugs, such as pills. Self-administered branded drugs are usually obtained from pharmacies, which are reimbursed for their cost through the Medicaid and PACE programs. During the period of Plaintiff Agencies’ claims, reimbursement for these drugs was based on estimated acquisition cost paid by the pharmacies, for which some variation of AWP was a proxy. Pharmacies were also paid a dispensing fee.

A small percentage of the Plaintiff Agencies’ claims here involve Medicare Part B drugs. These are injectable or infusible drugs which require administration by a physician. Eighty percent of the cost is reimbursed by the government.

See

42 U.S.C. § 1395Z;

MDL 2007,

491 F.Supp.2d at 33 . Patients or someone on their behalf (such as an insurer) are responsible for a 20% co-payment.

Id.

Since 1992, reimbursement and co-payment for Medicare Part B drugs has been based on a formula which included an AWP factor (plus an allowance for other costs, such as a dispensing fee).

See MDL 2007,

491 F.Supp.2d at 33-34 .

There are no generic drugs involved in this case.

BMS sells its branded drugs to wholesalers or specialty distributors at a price around the drug’s WLP, as discussed more fully elsewhere. In turn, these wholesalers sell BMS branded drugs to providers, such as pharmacies and physicians. In some instances, BMS sells its branded, Medicare Part B injectable drugs directly to physicians.

C. Procedural History

The initial procedural background to this complex litigation is set forth in this Court’s two prior

en banc

decisions at the preliminary objection stage.

See Commonwealth ex rel. Pappert v. TAP Pharm. Prods., Inc.,

885 A.2d 1127 (Pa.Cmwlth.2005)

(TAP II); Commonwealth ex rel. Pappert v. TAP Pharm. Prods., Inc.,

868 A.2d 624 (Pa.Cmwlth.2005)

(TAP

I).

Briefly, in March 2004, the Commonwealth filed its original complaint against 14 pharmaceutical companies alleging the companies engaged in improper conduct that caused certain Commonwealth entities, including DPW and PACE, to pay inflated prices for various pharmaceuticals the companies manufacture, market and sell. In response, the companies filed preliminary objections. In

TAP I,

we sustained the defendant pharmaceutical com

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panies’ preliminary objections challenging the sufficiency of the factual averments in the Commonwealth’s original complaint, but granted the Commonwealth leave to amend.

Shortly thereafter, the Commonwealth filed a corrected amended complaint, to which the defendant pharmaceutical companies again filed preliminary objections. The Commonwealth’s corrected amended complaint pled four causes of action: fraud or misrepresentation, civil conspiracy, unjust enrichment and violations of the CPL.

In

TAP II,

we overruled the defendant pharmaceutical companies’ global preliminary objections that challenged the sufficiency of the corrected amended complaint. We directed the defendant pharmaceutical companies to file answers, which they did.

This case then proceeded through a lengthy period of robust discovery administered in part by a discovery master. Counsel for BMS served as liaison counsel for all remaining defendants. By order, discovery closed on July 80, 2010.

In late-May 2010, the trial judge scheduled the case for jury trial in Northampton County on August 9, 2010. The pharmaceutical company defendants filed motions seeking separate trials.

After status conference with all remaining defendants, the trial judge granted in part, and deferred in part, the defendants’ motion for separate trials. In particular, the trial judge granted BMS’ motion so that only BMS would be involved in the August 9, 2010 jury trial.

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After final pretrial conference, the trial judge issued an order indicating his intention to submit issues related to the Commonwealth’s fraud and misrepresentation and civil conspiracy claims to the jury. The judge also indicated he would render a non-jury decision on the Commonwealth’s unjust enrichment and CPL claims.

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Additionally, shortly before trial, the trial judge disposed of 18 motions

in limine,

filed by the Commonwealth and BMS.

Trial commenced as scheduled on August 9 and continued over the ensuing five weeks. More than a dozen witnesses testified, prior testimony by more than 20 witnesses was read or presented by videotape, and over 300 exhibits, many voluminous, were received.

In addition to numerous trial rulings, at the close of the Commonwealth’s case-in-chief, the trial judge granted BMS’ motion for compulsory non-suit on the Commonwealth’s unjust enrichment claim on the ground the Commonwealth did not identify any fund to which a common-law equitable remedy would apply.

Consistent with the pretrial order, following the close of evidence the trial judge submitted issues relating to the Commonwealth’s claims of negligent misrepresentation, fraudulent misrepresentation and civil conspiracy to the jury. Additionally, issues relating to the Commonwealth’s claims under the CPL were submitted to the trial judge for non-jury decision.

Ultimately, the jury returned verdicts in favor of BMS on the Commonwealth’s claims for negligent and fraudulent mis

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representation.

See

Verdict Form, Phase I (Attachment A). More specifically, the jury answered “no” to the question of whether BMS was liable for negligent misrepresentation or fraudulent misrepresentation. Based on its response to these questions, the jury did not answer questions concerning causation. Additionally, the jury did not answer any questions relating to civil conspiracy, to damages or to outrageous conduct.

The next day, the trial judge heard oral argument on the Commonwealth’s claims under the CPL. Shortly thereafter, the judge issued his Decision, finding BMS violated the CPL by engaging in unfair or deceptive practices.

See

Decision Awarding Injunction and Restoration of 9/10/10 (Attachment B).

Consistent with Pa. R.C.P. No. 1038, the trial judge did not issue findings and conclusions, but he did dispose of all issues. In addition, he added sufficient explanation so that the parties could understand why he did not follow the jury verdict and how he calculated restoration amounts.

In particular, the trial judge acknowledged the jury verdicts finding neither negligent misrepresentation nor fraudulent misrepresentation. However, the trial judge concluded that a different standard applied in a CPL enforcement action.

See Weinberg v. Sun Co., Inc.,

565 Pa. 612 , 777 A.2d 442 (2001). Specifically, the judge indicated that, unlike claims for common law fraud or misrepresentation, a plaintiffs knowledge of the inaccuracy of a representation and a plaintiffs lack of reliance, while factors to be considered, are not necessarily complete defenses in an enforcement action brought in the public interest under Section 4 of the CPL, 73 P.S. § 201-4.

See MDL 2007; see also Com. v. Parisi,

873 A.2d 3 (Pa.Cmwlth.2005) (CPL to be liberally construed to effectuate legislative goal of consumer protection).

Ultimately, the trial judge issued a perpetual injunction restraining BMS from: contributing in any manner, directly or indirectly, to the reporting to DPW or to PACE of inflated AWPs for BMS drugs; and, contributing in any manner, directly or indirectly, to the creation, promotion or marketing of spreads for BMS drugs that are reimbursed by DPW or PACE.

In addition, pursuant to Section 4.1 of the CPL,

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73 P.S. § 201-4.1, the trial judge directed BMS to restore to the Commonwealth money in the amount of $27,617,952. To that end, the trial judge credited the damage methodology set forth in Exhibits 6A, 6B and 6C of the revised report of Commonwealth damage expert Frederick R. Warren-Boulton, Ph.D., for the period 1991 through 2004, with one exception. Specifically, the trial judge credited only that portion of the testimony of BMS expert Gregory K. Bell, Ph.D., that Dr. Warren-Boulton’s estimates were inflated by inclusion of drugs not in the case. To account for this problem, the trial judge reduced Dr. Warren-Boulton’s estimates by 40%.

The trial judge further found BMS willfully used practices declared unlawful by the CPL; however, the trial judge determined he lacked sufficient information to calculate civil penalties; as such, he declined to award any civil penalties under Section 8(b) of the CPL, 73 P.S. § 201-8(b). The trial judge credited Dr. Warren-Boulton’s civil penalty methodology that assumed a CPL violation occurred each time the reported AWP changed for a BMS drug, and assessing each violation at $1000. However, the trial judge indicated Dr. Warren-Boulton’s calculations were not limited to the period 1991-2004 for which restoration was awarded and could

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be inflated by drugs not in the case. As such, the trial judge declined to award civil penalties. The trial judge also declined to award any sums under Section 9.2 of the CPL,

9

73 P.S. § 201-9.2.

As a final point, the trial judge indicated the Decision was not immediately effective and would not become effective until the completion of post-trial practice.

See

Pa. R.A.P. 311(a)(4).

Shortly thereafter, both the Commonwealth and BMS filed post-trial motions. For its part, the Commonwealth seeks JNOV or, alternatively, a new trial on its negligent misrepresentation and civil conspiracy claims as well as modification of the Decision under the CPL to include an award of civil penalties, costs and attorney’s fees.

On the other hand, BMS challenges the trial judge’s findings that it violated the CPL and, therefore, requests the Court vacate its Decision awarding injunctive relief and restoration under the CPL.

II. BMS’ CHALLENGE TO STATUTORY INJUNCTION

A. Summary of BMS’ Argument

Through its Brief in Support of Its Motion for Post-Trial Relief or in the Alternative for a Stay, BMS asks this Court to change the Decision by vacating both the injunction and the order of restoration. BMS argues there is no evidence to support the relief granted, and it is inconsistent with the jury’s conclusion that BMS was not liable for negligent misrepresentation or fraud. Specifically, it contends the proposed injunction should be vacated for the following 15 primary reasons (with numerous sub-arguments):

• It will cause irreparable harm to innocent third parties.

• It is procedurally defective and violates due process.

• It interferes with the legislative and regulatory scheme.

• It will cause BMS irreparable harm.

• It unconstitutionally interferes with interstate commerce.

• Greater harm will come from entering the injunction than not entering it.

• It is not justified by any urgent necessity since, as the Court acknowledges in its Decision, the Commonwealth was not damaged after 2004.

• There is no threat of ongoing injury.

• The proposed injunction will not give the Commonwealth any information it does not already have.

• Even if they were harmed, DPW and PACE could be adequately compensated by monetary damages.

• The Decision is inconsistent with the jury’s verdict.

• BMS’ conduct is not in fact fraudulent or deceptive, or even unfair.

• The Decision is inconsistent with Judge Saris’ decision in

MDL 2007

on which the Court relies.

• There is no proof of causation because pharmacies are not overpaid.

• There is no proof that would support an injunction against marketing the spread because the practice makes no sense in the context of this case.

BMS’ Br. in Support of its Mot. for Post-Trial Relief or in the Alternative for a Stay at 8-9 (BMS’ Br.).

Of particular concern, BMS asserts, is the harm the injunction will cause to innocent third parties, including patients who rely on BMS drugs. BMS maintains the proposed injunction requires it to take steps to ensure the AWPs for its drugs are equal to their acquisition costs. It contends pharmacies will refuse to stock BMS drugs if they will lose 12 to 14 percent on every drug, which is the percentage below

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AWP that PACE and DPW currently reimburse pharmacies for drugs.

B. Sufficiency of Evidence

1. Contentions

BMS begins by reciting the common law elements necessary to obtain permanent injunctive relief. It then argues there is no proof that would justify the relief awarded here. Specifically, BMS maintains there was no proof that it made any misrepresentation to the Plaintiff Agencies. It contends there was no proof that DPW or PACE relied on anything BMS said or did. In fact, BMS asserts, Thomas Snedden, the Director of PACE, affirmatively testified he did not rely on BMS, and he was not defrauded or deceived by BMS. N.T., 8/24/10, at 1936-38, 2005-2006.

BMS maintains all present and former DPW and PACE employees testified they knew AWPs were not acquisition costs.

See

N.T., 8/24/10, at 1914; N.T., 8/24/10, at 2057-60; N.T., 8/26/10, at 2420-22; N.T., 8/30/10, at 2736; N.T., 8/30/10, at 2763-64; N.T. 8/30/10, at 2791-93; N.T., 8/31/10, at 2994. BMS argues there was overwhelming and unrebutted testimony and documents demonstrating DPW and PACE knew what acquisition costs were.

See

DX 1, DX 3-6, DX 8-12, DX 405, DX 482, DX 501, DX 514, DX 551, DX 553, DX 558, DX 564. BMS asserts the reimbursement formulas used by the Plaintiff Agencies were the product of choice, not any fraud or deception.

In addition, BMS maintains there was unrebutted testimony that pharmacies were not overpaid. BMS argues the Commonwealth’s own expert agreed pharmacies are not overpaid. N.T., 8/16/10, at 853 (Comanor). BMS contends there is no proof here that it caused the Commonwealth any harm.

For these reasons alone, BMS argues, the Decision should be vacated. It maintains an award under the CPL is improper where no evidence exists to support it.

See, e.g., Braccia v. Arlington Capital Mortg. Corp.,

Civ. Action No. 08-1370, 2009 WL 3756351 , at *12 (E.D.Pa. Nov. 9, 2009);

Sheikh v. Travelers Pers. Ins. Co.,

Civ. Action No. 06-1477, 2007 WL 2571451 , at *4 (E.D.Pa. Aug. 31,2007).

2. Analysis

The remedy of entry of judgment in a party’s favor is proper only where a party successfully challenges the sufficiency of the evidence. On the other hand, the remedy of a new trial is proper when the verdict rendered by the trial court indicates the trial court abused its discretion when weighing the evidence.

Morin v. Brassington,

871 A.2d 844 (Pa.Super.2005). “This distinction is crucial and is repeated

ad nauseum

by the appellate courts of this Commonwealth in both civil and criminal cases.”

Id.

at 851 . Here, BMS does not ask for a new trial.

A sufficiency analysis must begin by accepting the credibility and reliability of all evidence, viewed in the light most favorable to the verdict winner regardless of whether the losing party thinks the evidence was believable.

Id.

10

“In Pennsylvania, a permanent injunction will issue if the party establishes

*1221

[a] clear right to relief. The party need not establish either irreparable harm or immediate relief, as is necessary when seeking a preliminary injunction, and a court may issue a final injunction if such relief is necessary to prevent a legal wrong for which there is no adequate redress at law.”

Bd. of Revision of Taxes, City of Phila. v. City of Phila.,

607 Pa. 104, 133 , 4 A.3d 610, 627 (2010) (citations and quotations omitted).

Here, however, the remedy of injunctive relief is explicitly provided by statute. Specifically, Section 4 of the CPL, which relates to “Restraining prohibited acts,” states, as pertinent:

Whenever the Attorney General ... has reason to believe that any person is using or is about to use any method, act or practice declared by section 3 of this act to be unlawful, and that proceedings would be in the public interest,

he may bring an action in the name of the Commonwealth against such person to restrain by temporary or permanent injunction the use of such method, act or practice.

73 P.S. § 201 4 (footnote omitted) (emphasis added). By the plain terms of the statute, the Attorney General must prove: 1) that a person is using or about to use a practice declared unlawful by the CPL; and 2) that proceedings would be in the public interest.

Although BMS relies on the common law elements necessary to obtain an injunction, the basis for the injunction entered here is statutory. As a result, BMS’ arguments lack merit. This point is discussed in more detail below.

The proper analysis is set forth in

Commonwealth v. Burns,

663 A.2d 308 (Pa. Cmwlth.1995), a case involving a post-trial challenge to a permanent injunction under the CPL. There, this Court accepted the Attorney General’s argument that whenever a violation of a statute is found, such violation constitutes irreparable harm

per se,

and injunctive relief is appropriate. The only issue therefore is whether the record adequately supports the findings and conclusions.

Review of the record here reveals ample support for the trial judge’s determinations that BMS violated the CPL by engaging in unfair or deceptive acts or practices within the meaning of the “catchall provision” in Section 2(4)(xxi) of the CPL, 73 P.S. § 201-2(4)(xxi) (“Engaging in any other ... deceptive conduct which creates a likelihood of confusion or of misunderstanding.”). Based on his determinations that BMS violated the CPL,

see

Section 3 of the CPL, 73 P.S. § 201-3, (“Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce as defined by subclauses (i) through (xxi) of clause (4) of section 2 of this act ... are hereby declared unlawful”), the trial judge had a duty to issue an injunction to restrain BMS’ unlawful practices.

More specifically, similar to Judge Saris’ decision in

MDL 2007,

the trial judge first determined BMS engaged in unfair or deceptive practices by contributing to the reporting of inflated AWPs for its drugs to the Plaintiff Agencies. The record clearly supports this determination. To that end, as in

MDL 2007,

BMS claimed to be unique among drug manufacturers in that it did not directly report AWPs or suggested AWPs to the pricing compendia. However, as in

MDL 2007,

the trial judge here determined BMS knew, expected, and intended that when it reported a price, the publications would predictably calculate an AWP that was 20 to 25 percent higher than BMS’ WLP.

See

N.T., 8/19/10, at 1374-76, 1385-86 (Szabo); N.T., 8/17/10, at 1019-20 (Soule); PX-491; N.T., 8/11/10, at 158-162, 170-71, 173, 189-92, 194-95, 198-99, 218-19, 220-21, PX-133, PX-487, PX-

*1222

478, PX-474, PX-476 (Kaszuba); N.T., 8/11/10, at 247-49 (Norris); N.T., 8/16/10, at 678 (Comanor);

see MDL 2007,

491 F.Supp.2d at 60 . As in

MDL 2007,

the evidence was sufficient to conclude that BMS could affect, and at times fully control, the AWP for its drugs.

Id.

at 60-61 .

In addition, similar to

MDL 2007,

the trial judge determined BMS contributed to or participated in the promotion or marketing of spreads for its Medicare Part B drugs. Review of the record also discloses ample support for this determination.

See

N.T., 8/11/10, at 303 (Norris); N.T., 8/17/10, at 1004-05 (Soule); PX-399; N.T., 8/17/10, at 1010-11; PX-211;

see also

N.T., 8/12/10, at 487 (Peterson) (regarding Lynx20TN); PX-111; PX-8869 (AWP price report); N.T., 8/12/10, at 488-89, 490-93 (AWP price report showing Oncology Therapeutics Network Corporation (OTN) dispensing unit price and AWP based on selected modifier), 493 (spread-difference between amount of reimbursement and amount paid).

In short, contrary to BMS’ contentions, the trial judge’s determinations that BMS violated the CPL by engaging in unfair or deceptive practices are supported by substantial evidence. Based on these determinations, the trial judge was duty-bound to issue an injunction to restrain BMS’ unlawful practices.

BMS’ remaining arguments regarding the alleged lack of sufficient evidence to support the award of injunctive relief are addressed throughout this opinion, where appropriate. However, there are four important points to make here. First, regarding deception, the trial judge gave greater weight to evidence regarding confusion about AWP, and he rejected as not credible evidence suggesting that AWP was a term of art, widely known outside the pharmaceutical industry to be derived from a formulaic relationship of known proportions over WAC/WLP.

Second, also regarding deception, the trial judge rejected BMS’ contentions regarding “government knowledge.” Some evidence was not credible, some documentary evidence was given little weight, and the trial judge declined to draw inferences favorable to BMS. This is especially true of testimony by Thomas Snedden on this point, whose credibility was compromised by his demeanor, bias, and strong tendency to agree with whoever was questioning him.

Third, as to reliance, the trial judge rejected BMS’ contentions regarding “government choice.” Most importantly, the contention that the Plaintiff Agencies made deliberate policy decisions to reimburse at higher rates than other third-party payors was rejected as inconsistent with more credible evidence that pharmacy participation, also referred to as “access,” was never threatened and that reimbursement rates were beyond the sole control of the Plaintiff Agencies. The rejection was also based on the limited weight given documentary evidence and the refusal of the trial judge to draw inferences favorable to BMS on this issue. The trial judge determined that in Pennsylvania the level of reimbursement and the continuing reliance on formulae based on some form of AWP were the result of several factors: confusion over AWP; lack of a better proxy for provider acquisition costs; and, an inflexible reimbursement system where changes to laws and regulations came slowly, if at all.

Fourth, as to causation, the trial court accepted the expert opinion of the Commonwealth’s liability and causation expert, Dr. William Comanor, that the Plaintiff Agencies were harmed by enhanced price discrimination by the drug manufacturers, including BMS. The enhanced price discrimination took the form of different pricing/rebate schemes for public and private payors, resulting in public payors, such as

*1223

DPW and PACE, paying more than private payors. The trial judge rejected the testimony of pharmacist David Smith, relied upon by BMS, as not credible based on demeanor.

Further, the two unreported federal district court cases cited by BMS do not compel a different result. Specifically, in

Sheikh ,

a federal trial court dismissed a private plaintiffs CPL claim against an automobile insurance company based on the company’s alleged failure to pay benefits where the court determined the company acted properly in cancelling the policy prior to an accident for which the plaintiff sought benefits.

In

Braccia ,

a federal trial court rejected a private plaintiffs CPL claim against a mortgage company where the court determined the plaintiff did not prove reliance or injury as a result of an alleged misrepresentation that occurred when the plaintiff sought to obtain a residential mortgage.

Clearly,

Sheikh

and

Braccia

are distinguishable on their facts. Neither case involved an Attorney General enforcement action under the CPL’s catchall provision where, as explained below, the burden of proof is relaxed. Also, unlike in

Sheikh

and

Braccia

the evidence supports a determination that BMS violated the CPL by engaging in deceptive conduct (as further explained below) and that DPW and PACE suffered harm in the form of over-payments as a result of that violation.

C. Alleged Irreparable Harm to Others

1. Alleged Irreparable Harm to Innocent Third Parties

a. Contentions

BMS next asserts that today DPW reimburses pharmacies at the lower of AWP-14% or WAC + 7%. 55 Pa.Code § 1121.56(a)(l)(i). PACE currently reimburses pharmacies at AWP-12%.

See

Section 509(6) of the State Lottery Law.

11

BMS contends the undisputed evidence at trial showed these formulae were developed over a period of years after careful negotiation with pharmacies in an effort to arrive at an amount that would ensure patients’ access to care.

See

DX-501.

BMS maintains that while the proposed injunction prohibits it from contributing in any manner, directly or indirectly, to the reporting to DPW or PACE of inflated AWPs for its drugs, the undisputed evidence showed BMS does not report AWPs to the pricing compendia. Rather, BMS reports a list price that the pricing com-pendia mark up by 20-25% to arrive at an AWP. N.T., 8/11/10, at 215, 221-22. BMS argues the proposed injunction would require it to ask the pricing services to make the AWPs for its drugs equal to the list prices. BMS contends that if the pricing compendia were willing to do this, the AWPs for BMS drugs would be equal to their list prices. BMS maintains there was extensive, unrebutted trial testimony — by witnesses for both sides — that pharmacies acquire drugs at or near list price. It asserts if AWPs were made equal to list prices, the regulatory and statutory provisions cited above would be unaffected by the injunction, and pharmacies would immediately lose at least 12-14% on every BMS drug they acquired.

BMS argues that, as its expert Dr. Fiona Seott-Morton pointed out, if pharmacies were placed in a position where they lost 12-14% on every BMS drug, they would simply refuse to stock BMS drugs. N.T., 9/2/10, at 3456-58. BMS contends this would not only harm pharmacies; it

*1224

would also harm patients who would not have access ■ to BMS drugs. It argues some of these drugs are of critical importance in treating serious illnesses.

BMS contends the potential harm to innocent third parties is a critical factor that courts should consider in deciding whether to grant injunctive relief.

See Weinberger v. Romero-Barcelo,

456 U.S. 305, 312 , 102 S.Ct. 1798 , 72 L.Ed.2d 91 (1982);

accord Bradley v. Pittsburgh Bd. of Educ.,

910 F.2d 1172 , 1175 (3d Cir.1990). Indeed, it argues, courts refused to grant injunctive relief where interested parties were or could have been adversely affected.

See Weinberger; North Jersey Media Grp., Inc. v. Ashcroft,

308 F.3d 198 , 229 (3d Cir.2002).

b. Analysis

i. Waiver

BMS never raised an issue of alleged harm to others in such a way as to alert the trial judge to consider it in rendering the Decision.

See

BMS’ Proposed Findings of Fact and Conclusions of Law, filed 7/26/10 (pretrial); N.T., 9/9/10, at 3890-92 (after jury verdict, BMS closing on CPL). Also, there was no credible evidence offered by BMS as to the alleged harm to others in the context of an injunction. Indeed, BMS offered no evidence other than that applicable to the common law causes of action.

See id.

Therefore, this issue of alleged irreparable harm to others and its numerous sub-contentions are waived.

In a footnote to its Motion for Post-Trial Relief or Stay, BMS contends that “neither the Court nor the Plaintiff ever suggested entry of this type of injunction prior to September 10, 2010.” Mot. at 2, n. 1. This contention is a canard, for several reasons. First, contrary to BMS’ assertions, BMS had ample notice of the Commonwealth’s request for injunctive relief, which was specifically requested in the Commonwealth’s corrected amended complaint. Count. XXVII of the corrected amended complaint included a request that the Court enter “an Order permanently enjoining each and every Defendant from continuing the deceptive and/or unfair acts or practices complained of herein, and requiring corrective measures.” Corrected Am. Compl. at p. 215, ¶¶ 3,11.

Second, both the Commonwealth and the trial judge repeatedly raised issues regarding injunctive relief prior to and during the course of the trial.

See

N.T., 8/2/10, at 68 (mentioned at the pre-trial conference by the Commonwealth’s counsel when discussing the claims set forth in the complaint); N.T., 8/10/10, at 96 (mentioned by the Commonwealth’s counsel); N.T., 8/26/10, at 2365 (mentioned by the trial judge), 2370 (mentioned by the Commonwealth’s counsel prior to the start of BMS’ case-in-chief).

Also, the trial judge raised the injunction issue during closing arguments on the Commonwealth’s CPL claims, and a discussion occurred regarding the type of in-junctive relief sought.

See

N.T., 9/9/10, at 3860.

Third, BMS’ position throughout trial was to defend both the common law claims and the statutory claims in the same way, without additional issues or evidence related to the statutory claim.

Compare

BMS’ Proposed Findings of Fact and Conclusions of Law, filed 7/26/10 (pretrial), Conclusion # 31 (“The Commonwealth is thus unable to meet its burden of proving a violation of the [CPL] for the same reasons outlined with respect to its common law fraud claim.”),

with

N.T., 9/9/10, at 3892-3894

{after jury verdict,

during BMS’ closing on CPL claim, “the statutory claim fails for the very same reasons the jury found against the Commonwealth [on the common law claims].”).

As such, BMS received ample notice that the Commonwealth sought and the

*1225

trial judge was considering injunctive relief, but, consistent with its pretrial strategy, it did not present additional evidence or defenses to challenge the entry of such relief. By failing to present evidence or defenses at trial, BMS did not properly preserve an affirmative defense of harm to others.

ii. Failure of Proof

In addition, BMS’ irreparable-harm-to-others contentions are not supported by credible evidence. Accordingly, they fail for factual reasons. As discussed below, BMS presented no believable evidence showing pharmacies would drop out of these programs as a result of the injunction. Instead, opinion evidence to the contrary was accepted. Also, BMS’ argument that DPW recipients or PACE claimants will suffer if it cannot charge the Plaintiff Agencies the fictitious AWPs for its drugs, is entirely speculative.

The record does not support BMS’ assertions that the proposed injunction will cause irreparable harm to innocent third parties, namely, pharmacies, which would not stock BMS drugs, and patients, who would be deprived access to BMS drugs. Significantly, the trial judge rejected as not credible the testimony of BMS’ experts, Drs. Bell and Scott-Morton, upon which BMS bases its assertions. With regard to Dr. Bell, the trial judge rejected his testimony based on demeanor and on bias because of his strong financial relationship with BMS. N.T., 9/1/10, at 3114-15, 3217-24. The trial judge rejected the testimony of Dr. Scott-Morton based on demeanor. In any event, neither of BMS’ expert witnesses expressed opinions on the impact on pharmacies or patients that would result from requiring BMS to cease reporting or contributing to the reporting of inflated AWPs for its drugs.

Regarding the alleged effects of the proposed injunction on patients, BMS asserts some of its drugs are of critical importance in treating serious illnesses. However, BMS cites no record evidence to support its argument that the proposed injunction would have the effect of preventing patients from obtaining necessary medications or the actual effects on patients if that occurred.

iii. Modification of Injunction

Further, BMS views the injunction as requiring it to exercise some degree of control over the pricing compendia, which, it argues, would likely not comply with a request to change AWPs for BMS products.

12

BMS references the testimony of Kay Morgan, a former First DataBank employee whose deposition from a different case was

excluded

by the trial judge here.

See

N.T., 8/31/10, at 2967. BMS complains the exclusion was improper.

13

*1226

BMS asserts Morgan testified regarding First DataBank’s refusal to publish Average Sales Prices (ASPs) for other drug manufacturers. BMS argues it would have attempted to prove this fact if it had received notice of the requested relief. BMS’ Br. at 12, n. 8.

Contrary to BMS’ claim of surprise, BMS had ample notice of the request for injunctive relief. This notice is more fully discussed above.

More importantly, this Court can modify the terms of the injunction awarded against BMS so that it more closely resembles the injunction awarded against Johnson & Johnson Defendants, following the second trial in this case. Specifically, in that decision, the trial judge issued an injunction, which, among other things, restrained Johnson & Johnson Defendants from contributing, directly or indirectly, to the reporting to DPW and PACE of inflated AWPs

without also arranging for the transmission to the agencies of current, accurate estimated acquisition costs, such as Average Manufacturers Prices (AMPs) or ASPs, for each of their branded drugs in a format equivalent to that in which AWPs are reported to the agencies, or in another format acceptable to the agencies.

Thus, as modified, the injunction would not require the pricing compendia to make the AWPs for BMS drugs equal to WACs/ WLPs; rather, it would require BMS to transmit current, accurate estimated acquisition cost data to DPW and PACE in an appropriate format so as to allow these agencies to make informed decisions based on accurate data when developing their reimbursement formulae.

iv. Failure of Legal Support

In addition, BMS’ harm-to-others contentions fail as a matter of law because this is not a relevant consideration in determining whether to issue a statutory injunction. As discussed more thoroughly below, “[w]hen the Legislature declares certain conduct to be unlawful, it is tantamount to calling it injurious to the public.”

Pennsylvania Pub. Util. Comm’n v. Israel,

356 Pa. 400, 406 , 52 A.2d 317, 321 (1947). Such conduct cannot be permitted to continue.

Id.

Also, the cases cited by BMS do not compel the result it seeks. More specifically, in

Weinberger ,

the U.S. Supreme Court considered “whether the Federal Water Pollution Control Act

[14]

[FWPCA] requires a district court to enjoin immediately all discharges of pollutants that do not comply with the [FWPCA]’s permit requirements or whether the district court retains discretion to order other relief to achieve compliance.”

Id.

456 U.S. at 306-07 , 102 S.Ct. 1798 . There, the district court found the Navy violated the FWPCA by discharging ordnance into the sea during its weapons-training exercises without first obtaining a required permit. However, the Court declined to enjoin the Navy’s training operations; rather, it simply ordered the Navy to apply for a permit. The court reasoned the Navy’s “technical violations” were not causing any “appreciable harm” to the quality of the water, and an injunction would cause grievous harm to the Navy’s military preparedness and therefore to the Nation.

Id.

at 310 , 102 S.Ct. 1798 . On appeal, however, the First Circuit reversed, directing the district court to enjoin all training activities until the Navy obtained the required permit. It concluded the traditional equitable balancing of competing interests was inappropriate where there was an absolute statutory duty to obtain a permit.

On further appeal, however, the U.S. Supreme Court reversed. Initially, the Court acknowledged the fundamental principle that an injunction is an equitable

*1227

remedy that does not issue as of course. The Court reviewed the established principles governing the award of equitable relief in federal courts. The Court explained the essential bases for injunctive relief are irreparable injury and inadequacy of legal remedies. The Court stated that, where the plaintiff and the defendant advance competing claims of injury, a court must balance the competing claims and consider the effect on each party of the granting or withholding of the requested relief. The Court explained that, although “particular regard” should be afforded to the public interest, “[t]he grant of jurisdiction to ensure compliance with a statute hardly suggests an absolute duty to do so under any and all circumstances, and a federal judge sitting as chancellor is not mechanically obligated to grant an injunction for every violation of law.”

Id.

at 313 , 102 S.Ct. 1798 . Finally, the Court stated:

Of course, Congress may intervene and guide or control the exercise of the courts’ discretion,

but we do not lightly assume that Congress has intended to depart from established principles....

Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court’s jurisdiction in equity,

the full scope of that jurisdiction is to be recognized and applied.

Id.

(citation omitted) (quoting

Porter v. Warner Holding Co.,

328 U.S. 395, 398 , 66 S.Ct. 1086 , 90 L.Ed. 1332 (1946)) (emphasis added).

Applying these principles, the Court concluded the purpose of the FWPCA — to restore and maintain the integrity of the Nation’s waters — would not be undermined by allowing the Navy’s statutory violation to continue during the permit application process because the ordnance was not polluting the water. The Court determined an injunction against all discharges was not the only means of ensuring compliance with the FWPCA; it found nothing in the statute that suggested Congress intended to deny courts their traditional equitable discretion.

Unlike the FWPCA, at issue in

Wein-berger,

here the CPL specifically contemplates issuance of an injunction as the primary form of relief in an action brought by the Attorney General in the public interest. 73 P.S. § 201-4. Moreover, unlike in

Weinberger ,

where the facts indicated the Navy committed “technical violations” that did not cause “appreciable harm,” here BMS’ unlawful and deceptive business practices violate the primary purpose of the CPL, which is to “protect citizens from unfair or deceptive practices [and] to benefit the public at large by eradicating unfair or deceptive business practices.”

Chatham Racquet Club v. Commonwealth, by Zimmerman,

116 Pa.Cmwlth. 55 , 541 A.2d 51, 53 (1988) (citation omitted);

see also Commonwealth by Creamer v. Monumental Props.,

459 Pa. 450 , 329 A.2d 812 (1974) (CPL is to be construed liberally to effectuate its purpose of ensuring fairness in market transactions and placing sellers and consumers on equal ground). In addition, BMS’ unlawful practices directly harmed DPW and PACE by causing them to overpay for BMS drugs.

Further, BMS’ reliance on the Third Circuit’s decision in

Bradley

is misplaced. BMS cites

Bradley

for the proposition that a “district court should consider the effect of the issuance of a preliminary injunction on other interested persons and the public interest.”

Id.

910 F.2d at 1175. In

Bradley,

the Third Circuit considered “the propriety of [a] district’s court’s denial,

without a hearing or findings of fact or conclusions of law,

of [a teacher’s]

motion for preliminary injunction

preventing ... school officials from banning ... a teaching methodology she favored, and retaliating against her for using and advocating [that methodology].”

Id.

at 1174 (emphasis added). Ultimately, the Third Circuit

*1228

held the district court erred in failing to provide any basis for dismissal of the request for preliminary injunctive relief without a hearing.

Aside from the obvious factual distinctions between

Bradley

and this case, BMS offers no clear explanation as to how

Bradley

applies here. Specifically, the case presently before this Court involves the grant of a clearly-defined, statutorily-authorized permanent injunction issued after an extensive trial.

Bradley,

on the other hand, involved dismissal of a request for preliminary injunctive relief without a hearing or any explanation for the dismissal. Thus,

Bradley

does not advance BMS’ position.

In addition, BMS’ citation to

North Jersey Media

is puzzling.

North Jersey Media

involved a suit by media groups seeking access to certain “special interest” deportation hearings involving persons who the U.S. Attorney General determined might have connections to or knowledge of the September 11, 2001 terrorist attacks.

Id.

308 F.3d at 199. The district court found in favor of the media groups, and issued a preliminary injunction preventing the U.S. Attorney General from denying access to the hearings. On appeal, however, a divided panel of the Third Circuit reversed, holding the district court did not adequately consider evidence concerning the potential threat to national security posed by allowing access to the hearings.

While BMS cites

North Jersey Media

for the proposition that an injunction should not go “beyond providing relief to plaintiffs,” the language quoted by BMS is actually found in a dissenting opinion in the case.

Id.

at 229 (Scirica, J., dissenting). In any event, as with

Weinberger

and

Bradley,

discussed above, aside from the glaring factual distinctions between this case and

North Jersey Media,

BMS offers no explanation as to how the case applies here, particularly in light of the fact that it did not involve a statutorily authorized injunction.

2. Alleged Procedural Defect

a. Contentions

BMS next maintains that, because the Decision does not take into áccount the effects of the injunction, it is procedurally defective. BMS argues that, before granting or denying an injunction, a court must provide clear notice of the conduct to be enjoined, and an opportunity for all affected parties to be heard.

See Allegheny v. Milk Control Comm’n,

417 Pa. 22 , 207 A.2d 838 (1965) (lower court’s denial of injunction was erroneous “in the absence of a hearing, answer of proper motions filed and opportunity for the parties to be heard”). BMS argues that here the Commonwealth did not even ask for the relief the trial judge awarded. It contends, therefore, the proposed injunction violates fundamental principles of due process, including notice and an opportunity to be heard.

Pa. Bankers Ass’n v. Pa. Dep’t of Banking,

598 Pa. 313 , 956 A.2d 956 (2008).

b. Analysis

Due process requires a person be provided notice and an opportunity to be heard prior to an adjudication affecting that person’s rights.

Fountain Capital Fund, Inc. v. Pa. Secs. Comm’n,

948 A.2d 208 (Pa.Cmwlth.2008). It does not, however, confer an absolute right to be heard.

Id.

Due process is a right that a party may waive.

Id.

BMS’ arguments fail. As discussed above, the Commonwealth raised a claim for injunctive relief in its corrected amended complaint, as well as before and during the trial in this matter. In addition, the issue of injunctive relief was raised at the closing arguments on the Commonwealth’s CPL- claims, and a discussion occurred re

*1229

garding the type of injunctive relief sought.

Further, at trial BMS was on notice as to the specific conduct that was the target of the request for injunctive relief. In particular, at oral argument on BMS’ motion for compulsory non-suit, the trial judge inquired about the Commonwealth’s theory on its conspiracy claim.

See

N.T., 8/26/10, at 2353. In response, the Commonwealth identified four components to its theory of conspiracy, two of which, inflation of AWP, and creation, promotion or marketing of spreads,

see id.

at 2354, involve the specific conduct restrained by the trial judge through his award of in-junctive relief.

Additionally, when charging the jury on the Commonwealth’s conspiracy claim, the trial judge utilized a proposed contention point for charge submitted by the Commonwealth, which stated: “Plaintiff agencies assert that Bristol-Myers Squibb combined or agreed with one or more drug companies or others to do all of the following:

To cause to be reported inflated wholesale prices for their prescription drugs; to create and maintain spreads between their reported average wholesale prices and the actual prices charged for their

drugs.... ”

See

N.T., 9/8/10, at 3787 (emphasis added); Plaintiffs Proposed Jury Instructions, No. 27, served 8/31/10. Because BMS received the contention in writing days before the close of evidence, and because the trial judge specifically mentioned the type of conduct that was ultimately restrained in his instructions to the decision-maker on the common law claims, BMS had ample notice of the type of conduct that was the target of the request for relief.

In short, it is clear that BMS received notice and an opportunity to be heard on the Commonwealth’s claim for injunctive relief during the course of the five-week trial in this matter. Therefore, no due process violation occurred.

3. Alleged Interference with Statutory/Regulatory Schemes

a. Contentions

BMS further asserts if the Plaintiff Agencies had been given an opportunity to consider the relief ordered, they may have opposed it. BMS observes that Thomas Snedden testified PACE could not reduce drug reimbursement to actual acquisition cost without raising the dispensing fee to $10 — something that can only be done by the Legislature. N.T., 8/24/10, at 1976-78. BMS asserts DPW made clear that its reimbursement formula is designed to “assure the availability to MA clients of high quality pharmacy services, equal to that of the general population in the same geographic regions, at the best possible prices.” DX-501 at p. 3. BMS notes the Commonwealth affirmatively contended that obtaining changes in the reimbursement formulas is an arduous process at best. N.T., 9/9/10, at 3782.

BMS asserts additional testimony showed DPW’s actions are constrained by the Independent Regulatory Review Commission (IRRC), which considers proposals for changes in reimbursement after receiving input from various stakeholders, including the General Assembly, the Governor and the pharmacies.

See

N.T., 8/26/10, at 2457-61; 8/30/10, at 2570-72 (Love); N.T., 8/30/10, at 2735-36, 2740 (Yearsley); DX-500; DX-501 at p. 6; DX-699 at PA 501104; DX-804. It argues the IRRC rejected DPW’s efforts to lower reimbursement in the past. N.T., 8/26/10, at 2483; DX-500. BMS contends the proposed injunction upsets the delicate balance, which the IRRC, the General Assembly, the Governor and PACE established over the years.

*1230

BMS further asserts a court should not issue an injunction when it would “interfere with the exercise of ... discretionary powers” by other arms of government.

Jones v. Bonner,

107 Pa.Cmwlth. 283 , 523 A.2d 849, 850 (1987). Here, BMS maintains, as recently as 2008, DPW decided not to sponsor a proposal to lower reimbursement by 2% from AWP-14% to AWP-16% because “the overall savings that were estimated did not outweigh the costs of disruption to providers and access.” N.T., 9/1/10, at 3097 (Cathers). BMS argues the proposed injunction effectively trumps that 2008 determination and lowers reimbursement (at least on BMS drugs) to an amount significantly below pharmacy acquisition cost.

BMS contends the proposed injunction also threatens to harm the Commonwealth in other ways. It asserts the Commonwealth is required by federal law to establish reimbursement rates that will ensure access. 42 U.S.C. § 1396a(30)(A); 42 C.F.R. § 447.204 . BMS argues that if patients in Pennsylvania do not have access to BMS drugs, the federal funding the Commonwealth receives for its Medicaid program could be jeopardized. It maintains the Commonwealth currently receives approximately 65% of its funding for the Medicaid program from the federal government. BMS contends it would cause a major financial crisis for the Commonwealth, not to mention a health crisis for the recipients of Medicaid, if that funding were denied.

b. Analysis

BMS did not invite the fact-finder to consider any of these contentions during trial.

See

N.T., 9/9/10, at 3890-92 (closing arguments on CPL claim). Accordingly, they are waived.

Further, BMS’ arguments fail on the merits. As with several other arguments advanced by BMS, its arguments on this point begin with a mischaracterization of the language of the injunction.

As noted, the injunction as currently formulated restrains BMS from, among other things, “[cjontributing in any manner, directly or indirectly, to the reporting to [DPW] or to [PACE] of inflated [AWPs] for [BMS] drugs.... ” Decision at 2. The trial judge’s action in enjoining BMS from contributing to the reporting of fictitious prices in no way results in the alleged harm suggested by BMS. Also, if the Court modifies the injunction to more closely resemble the injunction issued against Johnson & Johnson Defendants, as explained above, it would simply require BMS to provide DPW and PACE with current, accurate estimated acquisition costs, in a useful format for each of their branded drugs. No change in the current AWP reporting would be needed.

There is no reason in this record or in common sense to support the claim that the Plaintiff Agencies would oppose the receipt of useful, accurate pricing data. This is the data for which the AWPs were intended as a proxy. This is particularly true if, as BMS asserts, the Agencies are unable to adequately defend their positions when proposing changes to their reimbursement rates because of the lack of clear information on estimated acquisition costs.

Most importantly, the trial judge rejected BMS’ contentions that the reimbursement levels utilized by the Plaintiff Agencies are the product of “choice.” BMS’ assertions on this point are based on the premise that DPW and PACE employees were concerned with ensuring access (i.e., protecting pharmacy participation) to their respective programs. To the extent DPW and PACE witnesses testified to concerns over access, however, the trial judge rejected this testimony as not credible because it was at odds with the accepted

*1231

expert testimony of Dr. Warren-Boulton, who explained in detail that no access problem existed (i.e., pharmacies leaving the network), even when reimbursement rates

decreased. See

N.T., 8/25/10, at 2173-78 (regarding DPW program); 2178-79 (regarding PACE program);

see also

N.T., 8/25/10, at 2204, 2212-18, 2219-20.

4. Alleged Irreparable Harm to BMS

a. Contentions

BMS next contends the proposed injunction will cause it irreparable harm. BMS asserts that if, as a result of the injunction, pharmacies refuse to stock its drugs, it will effectively be out of business in Pennsylvania. It argues an injunction that prevents a company from engaging in otherwise lawful activity is constitutionally invalid.

See Commonwealth ex rel. Davis v. Van Emberg,

464 Pa. 618 , 347 A.2d 712 (1975) (injunction must be narrowly tailored to avoid restraining lawful activities);

see also Commonwealth v. Zasloff,

137 Pa.Super. 96 , 8 A.2d 801, 803 (1939),

aff'[d,

338 Pa. 457 , 13 A.2d 67 (1940) (government edict that prevents “innocent transactions” violates due process).

BMS also maintains the proposed injunction will affect its business outside of Pennsylvania. BMS argues it does not report prices solely for use by the Plaintiff Agencies; rather, it reports list prices to national pricing services, which publish those prices on a nationwide basis. At this point, BMS asserts, it is unknown how the pricing services would react to a request by BMS that they change the way they report AWPs. BMS argues if the pricing services were unable, or refused, to limit any changes to Pennsylvania, the impact would be felt nationwide.

BMS also asserts other states, in an effort to ensure access to their Medicaid beneficiaries, established reimbursement formulas based on AWP. N.T., 8/25/10, at 2192-93 (Warren-Boulton). It contends private payors, located throughout the country, also have contracts with providers based on AWPs. N.T., 8/16/10, at 682-83, 690-92 (Comanor); N.T., 8/25/10, at 2205-07 (Warren-Boulton). BMS argues that if, as a result of the trial judge’s order, the pricing services decided to change the way they calculate AWPs, modification of regulations and statutes and the renegotiation of contracts nationwide would be required.

b. Analysis

As with the rest of its harm-to-others arguments, BMS does not indicate where in the record these concerns were preserved at trial. Accordingly, the argument is waived.

Also, BMS cites no record evidence to support its speculative assertions of harm to BMS. Accordingly, it failed to prove its contentions.

Additionally, BMS’ contentions mischar-acterize the terms and intended effect of the injunction. Moreover, as with the injunction entered after trial against Johnson & Johnson Defendants, the injunction against BMS can be modified to prohibit BMS from: contributing, directly or indirectly, to the reporting to DPW and PACE of inflated AWPs

without also arranging for the transmission to the agencies of current, accurate estimated acquisition costs, such as AMPs or ASPs, for each of their branded drugs in a format equivalent to that in which AWPs are reported to the agencies, or in another format acceptable to the agencies

and, promoting and/or marketing of spreads for branded drugs reimbursed by DPW and PACE (thereby eliminating the prohibition on

creation

of spread). This would limit the effect of the proposed injunction to the two Pennsylvania agencies, and it would moot BMS’ unsupported “parade of horribles.”

Further, BMS fails to support its contentions with applicable legal authority;

*1232

rather, the authority upon which BMS relies is distinguishable. In

Van Emberg ,

the Pennsylvania Supreme Court considered the validity of an injunction that prohibited the proprietor of an adult bookstore from engaging in “any business activity at the premises.”

Id.

at 619 , 347 A.2d at 713 . In that case, a court of common pleas initially granted an

ex parte

injunction prohibiting any business activity. No record of the proceeding was made. After hearing, the common pleas court entered a second decree continuing the injunction and specifying the defendants were enjoined from distributing in any manner “the book, papers, magazines and all other materials and exhibits referred to in the testimony taken in this matter.”

Id.

at 620 , 347 A.2d at 713 . Vacating the grant of the injunction, the Supreme Court explained:

The ex parte injunction enjoined defendants from ‘...

operating any business activity at the premises.’

The later decree issued after the hearing was not much more specific. The record indicates that there was a variety of books, magazines and other items, not established to be obscene, sold in this store. There is no basis in the record before us upon which the chancellor could have found that every item in the store was obscene and all sales properly enjoina-ble. The injunction is manifestly invalid on its face because of its failure to specify with particularity what materials were obscene and to limit its mandate to affect only those so designated.

The broad prohibition of this decree, enjoining all business activity, cannot be upheld.

This Court stated in

Collins v. Wayne Iron Works,

227 Pa. 326, 330 , 76 A. 24, 25 (1910):

‘The entry of an injunction is, in some respects, analogous to the publication of a penal statute. It is a notice that certain things must be done or not done.... Such a decree should be as definite, clear and precise in its terms as possible.... ’

The dissemination of printed material is one of the most zealously protected rights accorded by the United States Constitution and the Pennsylvania Constitution. In some circumstances specific publication may be enjoined because they do not enjoy constitutional protection. However, a blanket prohibition against the dissemination of all ‘books, papers, magazines and all other materials’ cannot be tolerated.

Id.

at 623-25, 347 A.2d at 715-16 (emphasis added) (citations and footnotes omitted).

Clearly, this is not a case like

Van Em-berg.

Unlike the broad prohibition on all business activity condemned by the Supreme Court in

Van Emberg ,

the language of the injunction here is sufficiently specific as to the conduct prohibited, and does not broadly prohibit BMS from conducting all business activity. Indeed, the trial judge here tailored his injunction so as to prohibit two discrete unlawful and deceptive business practices, which violated Pennsylvania law.

In addition, BMS’ reliance on

Zaslojf,

a 1939 Superior Court decision, is misplaced. There, the Superior Court declared unconstitutional the former Fair Sales Act

15

in response to a challenge by an individual who was charged with violating a provision that prohibited a retailer from selling any merchandise at less than his cost. The Pennsylvania Supreme Court affirmed, stating: “the right of an owner of property to fix the price at which he will sell it is an inherent attribute of the property itself, and as such within the protection of the

*1233

14th Amendment....”

Zasloff,

338 Pa. at 459 , 13 A.2d at 69 .

BMS’ reliance on

Zasloff

is unavailing given that it involved a statute that preceded the CPL, which the Supreme Court invalidated. Further, the underlying conduct at issue in

Zasloff

which simply involved a retailer’s sale of merchandise at a cost less than he paid, is far different from the unlawful and deceptive conduct, which the trial judge determined BMS employed here.

5. Alleged Commerce Clause Violation

a. Contentions

BMS next maintains the injunction unconstitutionally interferes with interstate commerce in two ways. First, BMS argues the injunction impermissibly acts as a direct regulation on interstate commerce by prohibiting BMS from marketing WAC to AWP spreads. BMS contends the injunction inappropriately uses Pennsylvania law to alter “industry-wide practices that thousands of companies, pharmacies and physicians nationwide have relied on to structure their business dealings for more than 40 years.” BMS’ Br. at 17.

In addition, BMS argues the injunction constitutes a form of “economic protectionism,” which benefits Pennsylvanians at the expense of non-Pennsylvanians. Specifically, BMS argues the injunction relieves the Plaintiff Agencies of the burden of negotiating discounts from industry-standard drugs and redistributes the burden to payors in the rest of the country.

b. Analysis

This argument fails for several reasons. First and foremost, BMS did not raise any issue regarding the Commerce Clause of the U.S. Constitution before the trial judge. Therefore, this issue is waived.

Second, as to the merits, the Commerce Clause of the U.S. Constitution enumerates to “the Congress [the] Power ... to regulate Commerce ... among the several States.” U.S. Const, art. I, § 8, cl. 3. The U.S. Supreme Court interprets the Commerce Clause as containing “an implicit or ‘dormant’ limitation on the authority of the States to enact legislation affecting interstate commerce.”

Healy v. Beer Inst., et al.,

491 U.S. 324 , 326 n. 1, 109 S.Ct. 2491 , 105 L.Ed.2d 275 (1989). The dormant Commerce Clause “prohibits economic protectionism-that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.”

New Energy Co. of Indiana v. Limbach,

486 U.S. 269, 273 , 108 S.Ct. 1803 , 100 L.Ed.2d 302 (1988) (citations omitted). In sum, since Congress possesses plenary power to regulate commerce among the states, states are prohibited from passing laws that discriminate against interstate commerce.

Indianapolis Power & Light Co. v. Pa. Pub. Util. Comm’n,

711 A.2d 1071 (Pa.Cmwlth.1998).

Courts apply a two-tiered approach when analyzing whether state economic regulation violates the Commerce Clause:

When a state statute directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests over out-of-state interests, we have generally struck down the statute without further inquiry. When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the State’s interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits.

Brown-Forman Distillers Corp. v. New York State Liquor Auth.,

476 U.S. 573, 579 , 106 S.Ct. 2080 , 90 L.Ed.2d 552 (1986);

see also Empire Sanitary Landfill, Inc. v. Dep’t of Envtl. Res.,

546 Pa. 315 , 684 A.2d 1047 (1996);

Kerbeck Cadillac Pontiac, Inc. v. State Bd. of Vehicle Mfrs., Dealers

*1234

& Salespersons,

854 A.2d 663 (Pa.Cmwlth. 2004).

In

Healy ,

the U.S. Supreme Court further explained:

The principles guiding this assessment ... reflect the Constitution’s special concern both with the maintenance of a national economic union unfettered by state-imposed limitations on interstate commerce and -with the autonomy of the individual States within their respective spheres. Taken together, our cases concerning the extraterritorial effects of state economic regulation stand at a minimum for the following propositions:

First, the “Commerce Clause ... precludes the application of a state statute to commerce that takes place wholly outside of the State’s borders, whether or not the commerce has effects within the State,

” ...

and, specifically, a State may not adopt legislation that has the practical effect of establishing “a scale of prices for use in other states.

” Second, a statute that

directly controls commerce occurring wholly outside the boundaries of a State exceeds the inherent limits of the enacting State’s authority and is invalid

regardless of whether the statute’s extraterritorial reach was intended by the legislature.

The critical inquiry is whether the practical effect of the regulation is to control conduct beyond the boundaries of the State.

Third, the practical effect of the statute must be evaluated not only by considering the consequences of the statute itself, but also by

considering how the challenged statute may interact with the legitimate regulatory regimes of other States and what effect would arise if not one, but many or every, State adopted similar legislation.

Generally speaking, the Commerce Clause protects against inconsistent legislation arising from the projection of one state regulatory regime into the jurisdiction of another State. And, specifically,

the Commerce Clause dictates that no State may force an out-of-state merchant to seek regulatory approval in one State before undertaking a transaction in another.

Healy,

491 U.S. at 335-37 , 109 S.Ct. 2491 (citations and footnotes omitted). The cases cited by BMS all involve instances of a court interpreting legislative action. None of the cases involve review of the terms of an injunction to determine if it violates the Commerce Clause. The Commerce Clause itself is directed at legislative power, enumerating power vested in the U.S. Congress. The dormant Commerce Clause implicitly identifies the limits of states in impacting interstate commerce.

Third, if the injunction is modified to conform to the injunction issued after Johnson & Johnson Defendants’ trial, no Commerce Clause violation is evident. This is because BMS will be able to comply with the injunction in a manner in current industry-wide use: reporting ASPs for its drugs. This has been a statutory requirement of all Medicare Part B drugs of all drug manufacturers nationwide since January 1, 2005. Also, because of settlement in the related Lupron litigation, reporting of ASPs has been a matter of Consent Agreement between the Commonwealth and TAP Pharmaceuticals, another Defendant in this case.

See

Def. TAP Pharmaceutical Products, Inc.’s Mem. in Support of its Mot. For Summ. J. at 4; Ex. 6, ¶ 17 (TAP agreed to report ASP data for all of its products reimbursed by Pennsylvania Medicaid).

16

Given this na

*1235

tionwide statutory change, and the existing reporting situation involving a co-Defendant, a commerce clause violation under a modified injunction is unclear at best.

6. Balancing the Harm

a. Contentions

BMS further argues that, in contrast to the harm that would follow from the injunction, no harm would result from refusing to grant relief. As discussed more fully below, BMS contends that the Plaintiff Agencies already have all the information they need to set appropriate reimbursement rates. BMS asserts witness after witness from the Plaintiff Agencies testified the current reimbursement levels (including payments for the drugs and the dispensing fees) are appropriate.

See

N.T., 8/30/10, at 2794-95 (Nardone); N.T., 8/31/10, at 2061-62 (Cathers); N.T., 8/24/10, at 1975-78, 1994-96 (Snedden). BMS further contends no court in any other AWP case granted an injunction of the type ordered here. It asserts the proposed injunction is unprecedented and unnecessary, and greater injury will result from entering than refusing to enter the injunction.

b. Analysis

BMS’ argument fails for several reasons. First, although BMS baldly asserts greater harm will result from upholding the grant of the injunction rather than denying it, BMS provides no explanation

from the record

of the harm that would result. This is not surprising given that, at trial, BMS presented no clear proof of the alleged harm that would result from the grant of any injunctive relief.

In addition, although BMS asserts that testimony by DPW and PACE witnesses confirmed that these Agencies have the information needed to set appropriate reimbursement rates, the record does not support this assertion. As explained in detail below, the testimony revealed significant confusion over the various pricing benchmarks used in the pharmaceutical industry and the import of each of these benchmarks as they relate to estimated acquisition costs for BMS branded drugs. Much of the testimony relied upon by BMS on this issue was given little weight by the trial judge, because the DPW and PACE witnesses, particularly Mr. Sned-den, appeared biased in favor of supporting their past decision-making.

Also, as explained above, the trial judge rejected BMS’ contentions that the reimbursement levels utilized by the Plaintiff Agencies were the product of “choice” by these agencies. BMS’ assertions on this point are based on the premise that DPW and PACE employees were concerned with ensuring access to their respective programs. To the extent DPW and PACE witnesses testified to concerns over access, however, the trial judge rejected this testimony as not credible because it was at odds with the accepted expert testimony of Dr. Warren-Boulton, who explained in detail that no access problem existed, even when reimbursement rates

decreased. See

N.T., 8/25/10, at 2173-78 (regarding DPW program); 2178-79 (regarding PACE program);

see also

N.T., 8/25/10, at 2204, 2212-13,2219-20.

Further, while BMS asserts a grant of injunctive relief is unprecedented, it makes no effort to discuss or compare other judicial opinions granting relief in AWP-related litigation with a case brought under a statutory scheme like the CPL, which expressly authorizes the Attorney General to seek injunctive relief to restrain CPL violations where such proceedings are in the public interest.

*1236

D. Alleged Lack of Urgent Necessity

1. Alleged Inconsistency in the Decision

a.Contentions

BMS next argues an injunction should be denied where there is no urgent necessity to avoid an injury that cannot be compensated by damages. It contends that the Decision recognizes there is no urgent necessity that cannot be compensated by monetary damages because the trial judge refused to award restitution after 2004, which is an obvious acknowl-edgement that the Commonwealth did not suffer harm after 2004.

b.Waiver

As with the preceding issue, the issue of alleged lack of urgent necessity (and its four sub-contentions) was not brought to the attention of the factfinder before entry of the non-jury Decision.

See

N.T., 9/9/10, at 3890-92 (during BMS’ closing on CPL claim, “the statutory claim fails for the very same reasons the jury found against the Commonwealth [on the common law claims].”). These arguments simply were not made during the closing, or at any other time during trial. Further, no affirmative evidence was offered on any of these points. The issue and its subparts are therefore waived.

c.Standard for Injunction Under CPL

Moreover, for the following reasons lack of urgent necessity (and its four sub-contentions) are not elements of the Commonwealth’s proof for an injunction in the public interest under the CPL. Rather, the Commonwealth must prove a violation of the CPL.

The remedy of injunctive relief here is explicitly provided by statute. Section 4 of the CPL, which relates to “Restraining prohibited acts,” states, as pertinent:

Whenever the Attorney General ... has reason to believe that any person is using or is about to use any method, act or practice declared by section 3 of this act to be unlawful, and that proceedings would be in the public interest,

he may bring an action in the name of the Commonwealth against such person to restrain by temporary or permanent injunction the use of such method, act or practice.

73 P.S. § 201-4 (emphasis added). This provision sets forth no express elements for injunctive relief beyond: 1) a person is believed to be using or about to use a practice declared unlawful by the CPL, and 2) proceedings would be in the public interest.

Commentators observe that where a statute authorizes a court to issue an injunction restraining a person from violating the statute, relief is available without regard to the adequacy of a remedy at law. 15 STANDARD Pá. PRACTICE 2d, § 83:245 (citing former Section 4 of the Food Act,

17

formerly

31 P.S. § 20.4). As an obvious corollary, where a statute authorizes restoration when an injunction issues, the existence of the additional restoration remedy does not diminish the availability of the injunction. Section 4.1 of the CPL, 73 P.S. § 201-4.1. To hold otherwise would produce an absurd result. In these ways,

*1237

statutory provisions may alter the elements needed to obtain a statutorily authorized injunction.

Consistent with this analysis, in

Bums,

a case involving a post-trial challenge to a permanent injunction under the CPL, this Court accepted the Attorney General’s argument that whenever a violation of a statute is found, such violation constitutes irreparable harm

per se,

and injunctive relief is appropriate. The only issue therefore is whether the record adequately supports the findings and conclusions.

This analysis is also consistent with the leading case on this issue, our Supreme Court’s decision in

Israel .

In

Israel ,

the Public Utility Commission filed suit in Dauphin County Common Pleas Court (sitting as Commonwealth Court) seeking to enjoin a transportation company from operating taxicabs because the company did not possess a certificate of public convenience as required by statute. Notably, Section 903 of the Public Utility Law,

18

then in effect, provided, as pertinent:

Whenever the commission shall be of opinion that any person * * * is violating, or is about to violate, any provisions of this act; or has done, or is about to do, any act, matter, or thing herein prohibited or declared to be unlawful; * * * then and in every such ease

the commission may institute in the court of common pleas of Dauphin County, injunction, mandamus, or other appropriate legal proceedings, to restrain such violations of the provisions of this act, or of the regulations, or orders of the commission, and to enforce obedience

thereto....

The operators of the transportation company challenged the commission’s request for a preliminary injunction, asserting, because there was no allegation of irreparable injury, no preliminary injunction could issue. Adopting and quoting from the well-reasoned opinion of the Honorable Robert E. Woodside, Jr., our Supreme Court stated:

At the hearing the Commonwealth ... made a prima facie showing that the defendants are operating taxicabs in violation of law.

The argument that a violation of law can be a benefit to the public is without merit. When the Legislature declares certain conduct to be unlawful it is tantamount in law to calling it injurious to the public. For one to continue such unlawful conduct constitutes irreparable injury.

* * *

In

Commonwealth v. Pittsburgh & Connellsville Railroad Co.,

1854, 24 Pa. 159, 160 , 62 Am. Dec. 372 , the Court said:

‘The argument that there is no ‘irreparable damage,’ would not be so often used by wrongdoers, if they would take the trouble to observe that the word ‘irreparable’ is a very unhappily chosen one, used in expressing the rule that

an injunction may issue to prevent wrongs of a repeated and continuing character,

or which occasion damages which are estimable only by conjecture and not by any accurate standard. * * *

Besides this, where the right invaded is secured by statute ... there is generally no question of the amount of damage, but simply of the right.’

Id.

at 406-07 , 52 A.2d at 321 .

Ultimately, the Court concluded:

When the provisions of the Public Utility Commission Law are being violated the Legislature provided for the Commission to come before this Court,

*1238

and prevent the violation by obtaining an injunction.

When the right to such injunction is clear, as it is here, under the undisputed facts, it is our duty to issue a preliminary injunction.

Id.

at 409 , 52 A.2d at 321 (emphasis added).

Israel

stands for the proposition that, for purposes of injunctive relief, statutory violations constitute irreparable harm

per se.

Although

Israel

concerned the irreparable harm criterion for issuance of a preliminary injunction, it is helpful here because it involved a scenario in which an agency, which was statutorily authorized to obtain an injunction to restrain statutory violations, was granted such an injunction upon proof that a clear statutory violation occurred.

Further support for our conclusion that the common law criteria for a permanent injunction do not apply here can be found in the recent AWP litigation decision in

Commonwealth of Kentucky ex rel. Conway v. Alpharma USPD, Inc. et al.,

No. 04-CI-1487 (Franklin Cir. Ct., Div. 1, Jan. 19, 2011) (unpublished decision denying post-trial motions of drug manufacturer found guilty of violating Kentucky Consumer Protection Act, Ky.Rev.Stat. Ann. §§ 367.110-367.360). In that decision, Franklin Circuit Court Judge Phillip J. Shepherd denied post-trial motions of a drug manufacturer which was found to have violated the Kentucky Consumer Protection Act by manipulating and falsely reporting AWPs for its drugs reimbursed by the Kentucky Medicaid Program. Discussing the standard for injunctive relief under that consumer protection statute, Judge Shepherd wrote: “KRS 367.190 authorizes the issuance of injunctive relief upon proof of a violation, without demonstration of irreparable injury, inadequate remedies at law, or other common law requirements for an injunction.”

Id.,

slip op. at 16.

As discussed more fully above, our review of the record here reveals ample support for the trial judge’s determinations that BMS violated the CPL by engaging in unfair or deceptive acts or practices within the meaning of the “catchall provision” in Section 2(4)(xxi) of the CPL, 73 P.S. § 201-2(4)(xxi) (“Engaging in any other ... deceptive conduct which creates a likelihood of confusion or of misunderstanding.”). Based on the trial judge’s determinations that BMS violated the CPL, the trial judge had a duty to issue an injunction to restrain BMS’ unlawful practices.

Israel .

d. Urgent Necessity

Based on the foregoing discussion, we do not believe that proof of “urgent necessity to avoid an injury that cannot be compensated by damages” is an element of the Commonwealth’s proof under Section 4 of the CPL. Nevertheless, there are additional reasons why we discern no merit in BMS’ position on this issue. Specifically, we conclude: 1) that an injunction can issue to restrain future conduct based on prior unlawful activity; 2) that cessation of the offending conduct does not, in and of itself, bar a claim for injunctive relief; and 3) the Court may consider whether the offending conduct is likely to reoccur absent the grant of an injunction.

Section 4 of the CPL, which relates to “Restraining prohibited acts,” states, as pertinent:

Whenever the Attorney General ... has reason to believe that any person

is using or is about to use

any method, act or practice declared by section 3 of this act to be unlawful, and that proceedings would be in the public interest, he may bring an action in the name of the Commonwealth against such person to restrain by temporary or permanent in

*1239

junction the use of such method, act or practice.

73 P.S. § 201-4 (emphasis added).

Our Supreme Court holds that the mere fact that an illegal practice has been abandoned does not necessarily render a controversy moot.

Tamagno v. Waiters & Waitresses Union, Local No. 301,

373 Pa. 457 , 96 A.2d 145 (1953). In particular, the fact that the defendants had for two years obeyed a permanent injunction did not justify vacation of the injunction. “[E]ven though the defendant may give assurance that he will not err again it is for the court to say whether the complainant should be compelled to accept such assurance instead of insisting upon the continuance of the injunctive relief which he has obtained.”

Id.

at 461 , 96 A.2d at 147 .

Similarly, in

Commonwealth v. Percudani,

844 A.2d 35 (Pa.Cmwlth.),

amended on reconsideration by,

851 A.2d 987 (Pa. Cmwlth.2004)

(Percudani II),

this Court considered whether under Section 4 the Attorney General could seek to enjoin future conduct based on past violations of the CPL where the alleged offending conduct ceased prior to the Attorney General’s filing of the complaint.

Factually,

Percudani II

involved a complaint in equity filed by the Attorney General against various defendants alleging CPL violations that arose out of the defendants’ construction, sale and mortgage of residential homes. Pertinent here, the Attorney General averred one of the defendants, a certified appraiser, misled consumers by issuing inflated appraisals of their homes. As a result, the Attorney General sought to enjoin the appraiser from committing further CPL violations. The defendants, including the appraiser, filed preliminary objections to the Attorney General’s complaint.

In particular, the appraiser sought dismissal of the suit on the grounds the Attorney General lacked standing to pursue the action, and this Court lacked subject matter jurisdiction over the suit. Specifically, the appraiser argued that prior to the filing of the suit, he entered into a consent agreement with the State Bureau of Professional and Occupational Affairs in which he agreed to surrender his appraisal license and agreed not to seek reinstatement for at least five years. The appraiser asserted Section 4 of the CPL authorized the Attorney General to bring suit against any person who is believed to be

“using or is about to use

” any deceptive act or practice, but did not permit an action based on past acts or practices.

Percudani II,

844 A.2d at 45 (emphasis in original). The appraiser asserted:

the Legislature’s use of the present tense limits the Commonwealth’s ability to pursue violations of the [CPL] to ongoing deceptive acts or practices. In essence, [the appraiser] claims that because he cannot perform appraisals by virtue of the consent order, which was entered prior to the filing of the Commonwealth’s complaint, he cannot presently use or in the near future use allegedly deceptive acts or practices. Therefore, there is nothing that the Commonwealth can prohibit nor can he be held accountable for his past conduct. He argues that the [CPL] does not create a cause of action against those who cannot presently or in the future use deceptive acts or practices.

Id.

Rejecting this argument, a divided panel of this Court, speaking through Senior Judge Jiuliante, stated:

Our research has uncovered several cases in which the Commonwealth had sought to enjoin future conduct based on past acts.

Consequently, case law indicates that the Commonwealth may

*1240

pursue -violations of the Law based on past illegal activities.

[19]

In his reply brief, [the appraiser] cites

Eugene Dietzgen Co. v. FTC,

142 F.2d 821 (7th Cir.1944), to suggest that since the consent order has stopped the allegedly unfair practice, the object of the [AG’s] action, namely an injunction to prevent further violations of the [CPL], is unnecessary. Notwithstanding, the propriety of the actual issuance of an injunction against [the appraiser] is premature inasmuch as presently before the Court are [defendants’ preliminary objections.

Whether the [AG] is able to sustain its burden of proof and the appropriateness of any remedy imposed is a matter to be heard at another time.

Furthermore, if we adopted [the appraiser’s] interpretation of Section U of [CPL] and limited the [AG’s] actions to ongoing activities, the purpose of the[CPL] would be frustrated.

As

even [the appraiser] points out, a party could simply avoid liability under the[CPL] by discontinuing its actions even after proceedings are commenced and claim that the matter is moot. Such an interpretation would do little in the way of preventing unfair or deceptive acts or practices and compensating injured consumers. In ascertaining legislative intent, we may consider the con sequences of a particular interpretation and may presume that the legislature did not intend a result that is absurd or unreasonable.

1 Pa.C.S. § 1921(c) and § 1922;

Pennsylvania State Police, Bureau of Liquor Control Enforcement v. McCabe,

163 Pa.Cmwlth. 11 , 644 A.2d 1270 (1993).

To allow a party to avoid liability for its actions by merely discontinuing its conduct would render the penalty provisions of the [CPL] meaningless in their application.

Percudani II,

844 A.2d at 45-46 (emphasis added). Thus, the panel majority (Senior Judge Judiante and Judge Cohn-Jubelirer) held the Attorney General could seek an injunction against the appraiser despite the lack of a current threat of ongoing injury because of the underlying consent order, which restrained the appraiser from conducting appraisals.

In a dissenting opinion, Judge Leavitt disagreed that the Attorney General could seek an injunction against the appraiser where the professional licensing body previously restrained the appraiser from engaging in the alleged unlawful conduct.

*1241

Judge Leavitt also disagreed with the majority’s interpretation of the CPL, stating:

The [CPL] authorizes the [AG] to institute an action to enjoin an unfair trade method, act or practice “[whenever the [AG] ... has reason to believe that any person

is using or is about to me”

this practice. 73 P.S. § 201-4. The [AG] asserts that this provision authorizes his action against [the appraiser], who is out of the business of appraising real estate and will be for at least the next five years. Stated otherwise, the [AG] sees no distinction between “has used” in the past, “is using” in the present or “about to use” in the future. However, the only way to read the actual words of the [CPL] is that past conduct that is no longer continuing cannot support a complaint.

The distinction between “has used,” “is using” and “is about to use” has been given effect in precedent interpreting an unfair trade practice statute very similar to Pennsylvania’s [CPL]. In

State ex rel. McLeod v. Brown,

278 S.C. 281 , 294 S.E.2d 781 (1982), the defendants contended that the state attorney general could not pursue an action against them because they had voluntarily ceased the conduct cited in the complaint. The South Carolina Supreme Court rejected this defense because the unfair trade practice statute expressly authorized actions against a person who “has used” an unlawful practice.

Brown,

294 S.E.2d at 782-783 . Indeed, the South Carolina statute authorized the state attorney general to seek civil penalties as well as injunctive relief for violations that had occurred in the past but had discontinued.

In sum, the words “is using or is about to use” have a meaning separate from “has used.” We must enforce the actual language used by the General Assembly in the [CPL], and we must not insert words that are not there under the principle

expressio unius est exclu-sio alterius.

The allegation that [the appraiser] may have engaged in an unfair trade practice in the past, but is no longer, cannot support an action under the [CPL], The [AG] cannot aver that [the appraiser] “is using” or “is about to use” an unfair method of doing real estate appraisals. By virtue of the ... consent order, [the appraiser] is barred from doing

any

real estate appraisals, whether fair or unfair.

Percudani II,

844 A.2d at 51-53 (Leavitt, J., dissenting) (emphasis in original) (footnotes omitted).

Of further note, Judge Leavitt’s dissenting opinion also briefly explained how this issue would be addressed under the Federal Trade Commission Act (FTC Act), 15 U.S.C. §§ 41-58 , the federal law upon which the CPL is modeled. Specifically, Judge Leavitt stated:

The parties are in agreement that the [CPL] is modeled on the ... FTC Act.... The FTC Act includes the language “has used,” and, in this respect, FTC case law precedent has limited value to this controversy. Nevertheless,

the FTC may not issue a cease and desist order to restrain a practice long discontinued and where there is no reason to believe it will be renewed. Rodale Press, Inc. v. Federal Trade Commission,

407 F.2d 1252 (D.C.Cir.1968);

Marlene's Inc. v. Federal Trade Commission,

216 F.2d 556 (7th Cir.1954).

The result is different where the defendant claims the right to renew the practice.Stanley Laboratories v. Federal Trade Commission,

138 F.2d 388 (9th Cir.1943)....

Percudani II,

844 A.2d at 53, n. 6 (Leavitt, J., dissenting) (emphasis added). Thus, the FTC cannot issue a cease and desist order to restrain prior unlawful conduct where the conduct ceased,

and

where

*1242

there is no reasonable probability that the conduct will reoccur.

With regard to the FTC’s power to issue a cease and desist order where the offending conduct ceased, in

Hershey Chocolate Corp. v. Federal Trade Commission,

121 F.2d 968, 971-72 (3d Cir.1941) (footnotes omitted), the Third Circuit explained:

[T]he petitioners contend that the order is invalid in that the practices ordered ceased were discontinued shortly before the complaint was issued.... The [FTC] would have no power at all if it lost jurisdiction every time a competitor halted an unfair practice just as the [FTC] was about to act.

The practice may have been discontinued but without the [FTC’s] order it could be immediately resumed.

Likewise the [FTC’s] power would be limited indeed if it were restricted to enjoining unfair acts of competitors only as evidenced in the past. To be of any value the order must proscribe the method of unfair competition as well as the specific acts by which it has been manifested. In no other way could the [FTC] fulfill its remedial function.

See also Beneficial Corp. v. Fed. Trade Comm’n,

542 F.2d 611, 617 (3d Cir.1976) (citations omitted) (“[T]his and other courts have held that at least where a discontinued deceptive trade practice could be resumed, the prior practice may be the subject of a cease and desist order.”);

Fleet v. U.S. Consumer Council Inc.,

95 B.R. 319, 339 (E.D.Pa.1989) (citations omitted) (“[W]e shall issue an injunction enjoining [defendants ... from continuing to engage in deceptive and unconscionable commercial practices.... Even though [the corporate defendant] is and has been out of business for over five years, it is clearly not an impossibility that either [the corporate defendant], under different management, or [its chief operating officer], under a different corporate guise, could attempt to resume a like business again.”) (citing

City of Mesquite v. Aladdin’s Castle, Inc.,

455 U.S. 283, 289 , 102 S.Ct. 1070 , 71 L.Ed.2d 152 (1982);

United States v. W.T. Grant Co.,

345 U.S. 629, 632 , 73 S.Ct. 894 , 97 L.Ed. 1303 (1953) (defendant’s voluntary cessation of activity does not render request for injunctive relief moot because otherwise defendant would be free to return to his old ways));

People ex rel. Spitzer v. Applied Card Sys., Inc.,

27 A.D.3d 104 , 805 N.Y.S.2d 175, 179 (N.Y.App.Div.2005) (“To the extent that respondents voluntarily discontinued [their conduct] ... such voluntary discontinuance of fraudulent or deceptive practices will not bar the issuance of an injunction to prevent future practices.”)

The rules that can be synthesized from the above authority are: (1) an injunction can issue to restrain future conduct based on prior unlawful conduct,

Percudani;

(2) cessation of the alleged offending conduct does not, in and of itself, bar a claim for injunctive relief,

Hershey Chocolate; id.;

and, (3) the Court should consider whether the alleged offending conduct is likely to reoccur absent the grant of an injunction.

Applying the principles gleaned from the authority outlined above, we reject BMS’ position. While it asserts the record contains no proof of an ongoing threat of injury, there is also no evidence that BMS, in fact, ceased all its offending conduct and promised not to renew it. To the contrary, BMS contended that all past activity was lawful and it did nothing wrong.

Moreover, BMS continues to report WLPs to the pricing compendia, which in turn continue to report fictitious AWPs to the Plaintiff Agencies. Also, there was no believable evidence that BMS intended to permanently change any marketing or reporting practice without a court order. In this regard, there was no believable evidence that BMS would make more transaction pricing information available in a

*1243

usable format to the Plaintiff Agencies without a court order. Thus, issuance of a perpetual injunction under Section 4 of the CPL was proper.

In addition, the CPL contains a more formal mechanism by which an alleged offender can provide assurance that such conduct has, in fact, ceased and will not be renewed. Specifically, Section 5 of the CPL (relating to “Assurances of voluntary compliance”), states:

In the administration of this act, the Attorney General may accept an assurance of voluntary compliance with respect to any method, act or practice deemed to be violative of the act from any person who has engaged or was about to engage in such method, act or practice. Such assurance may include a stipulation for voluntary payment by the alleged violator providing for the restitution by the alleged violator to consumers, of money, property or other things received from them in connection with a violation of this act. Any such assurance shall be in writing and be filed with the court. Such assurance of voluntary compliance shall not be considered an admission of violation for any purpose. Matters thus closed may at any time be reopened by the Attorney General for further proceedings in the public interest, pursuant to section 4.

73 P.S. § 201-5. Thus, a voluntary compliance agreement, which must be filed with the court, is the formal mechanism by which a party can assure its alleged offending conduct ceased and will not reoccur.

Indeed, TAP Pharmaceutical Products, Inc., a former defendant in this suit, entered into such an agreement in connection with its settlement of the related Lupron litigation. As part of its settlement, TAP agreed to report ASP data for

all

of its products reimbursed by Pennsylvania Medicaid.

See

Def. TAP Pharmaceutical Products, Inc.’s Mem. in Support of its Mot. For Summ. J. at 4; Ex. 6, ¶ 17. As such, the type of agreement contemplated by Section 5 of the CPL is not unfamiliar to the drug companies in the context of this litigation.

Because there is a specific CPL provision to ensure a voluntary permanent cessation of conduct, and BMS did not utilize the available procedure, the non-CPL cases they cite do not control. Absent the filing of such an enforceable agreement, an injunction should remain in effect to restrain the unlawful conduct.

Also, the decision not to award statutory restoration after 2004 is in no way inconsistent with the trial judge’s grant of in-junctive relief. First, BMS fails to acknowledge the structure of the CPL as it relates to Attorney General enforcement actions. Based on the plain language of Section 4.1 of the CPL, a grant of injunc-tive relief is a prerequisite to an award of restoration.

See

73 P.S. § 201-4.1. There is no authority to the contrary. Thus, upon finding violations of the CPL, the trial judge was authorized to grant injunc-tive relief, which, in turn, provided him with discretion to also award restoration.

In addition, the decision not to award statutory restoration post-2004 was based on a number of considerations, including changes in the statutory and regulatory reimbursement formulae for the Plaintiff Agencies, which occurred after 2004, and the passage of the federal Medicare Prescription Drug, Improvement and Modernization Act, which took effect in January 2005. In short, no inconsistency exists between the grant of injunctive relief and the award of statutory restoration for a closed period.

2. Alleged Lack of Ongoing Injury

a. Contentions

BMS further maintains the Commonwealth did not demonstrate a current

*1244

threat of an ongoing injury so as to justify the grant of injunctive relief. It contends that, at the Commonwealth’s request, the trial judge barred evidence of any conduct after 2008. As a result, BMS asserts, no evidence of any ongoing injury appears of record. For the same reason, BMS argues, it was deprived the opportunity to show the Commonwealth no longer suffers from any injury it may have incurred in the past. BMS maintains where, as here, no threat of ongoing injury is shown, an injunction should be denied as there is nothing to enjoin.

See Christoffel v. Shaler Area Sch. Dist.,

60 Pa.Cmwlth. 17 , 430 A.2d 726 (1981);

Weichert Co. of Pa., Inc. v. Long & Foster Real Estate, Inc.,

Dkt. No. 03-00849, 2005 WL 6195331 (C.P. Montgomery 2005).

b. Analysis

Although another defendant group which proceeded to a separate trial raised this issue in its pretrial memorandum, BMS did not.

20

Moreover, BMS did not alert the trial judge to consider this contention at any time before the Decision.

Regardless of waiver, the contention lacks merit, for the reasons discussed in the preceding section of this opinion.

3. Alleged Failure to Provide Meaningful Relief

a. Contentions

BMS also asserts that the Plaintiff Agencies have all the information they need to determine appropriate reimbursement rates. BMS argues that DPW and PACE have access to the Health and Human Services Office of the Inspector General (OIG) reports that summarize the results of surveys concerning pharmacy acquisition costs.

See

N.T., 8/24/10, at 1972-74 (Snedden); N.T., 8/26/10, at 2421-22, 2424, 2426-27, 2473, 2480-84 (Love). Further, BMS contends that from time to time the Commonwealth conducted its own surveys or audits to determine actual acquisition costs, and can continue to do so in the future.

BMS argues the Commonwealth also has access to every piece of information BMS has in its possession, custody or control regarding actual acquisition costs of pharmacies and doctors. BMS maintains it calculates the following types of relevant pricing information in the regular course of its business: WLPs (prices at which BMS sells to wholesalers, which, according to testimony by a BMS witness, are very close to what retail pharmacies pay for drugs), N.T., 8/31/10, at 2842-43 (Larkin); AMPs (prices determined in accordance with regulatory requirements that reflect net prices, after discounts, of products destined for the retail class of trade; they are slightly below list prices — and, therefore, below pharmacy acquisition costs — because they reflect prompt pay discounts and discounts to mail order pharmacies), N.T., 8/31/10, at 2852-55, 2872-73; and, (3) ASPs (prices for physician administered drugs calculated pursuant to regulatory requirements and published on the internet), N.T., 8/31/10 at 2851-52).

*1245

BMS contends the Commonwealth already has access to all of these prices; thus, it asserts that there is nothing more it can provide. Also, BMS asserts that it is not involved in transactions between wholesalers and retail pharmacies; therefore, it is not in a position to provide those prices other than to estimate generally that they are close to list prices, which BMS provides. N.T., 8/11/10, at 282-83 (Norris). In fact, BMS argues the Commonwealth has greater access to pharmacy acquisition costs because it can audit pharmacies, and BMS cannot.

BMS maintains where, as here, an injunction would not provide meaningful relief, it should not be issued. As noted above, BMS contends that the only practical means BMS has to comply with the injunction is to ask the pricing services to make the AWPs for BMS drugs equal to WACs/WLPs.

b. Analysis

i. Waiver

BMS did not invite the trial judge to consider that any injunction would be incapable of providing meaningful relief because of the structure of the drug pricing system.

See

N.T., 9/9/10, at 3890-92 (closing argument on CPL claim). Accordingly, this contention is waived.

Also, on the merits we reject BMS’ argument that the injunction will provide no meaningful relief because the Plaintiff Agencies have all of the information they need to set appropriate reimbursement rates. There are two general reasons for this conclusion. First, the trial judge found that there is much confusion regarding AWPs and actual provider acquisition costs. Second, the trial judge found that the information available to Plaintiff Agencies is not useful because of format, timing, and ambiguity and because it does not cover each National Drug Code (NDC).

ii. AWP Confusion

Regarding AWP confusion, the trial judge found that the pricing system utilized in the pharmaceutical industry is very complicated,

see, e.g.,

N.T., 8/16/10, at 712-13, 722 (Comanor). As a result, confusion over the meaning and import of each of the various pricing values, seriously hindered, if not completely prevented, the efforts of DPW and PACE to discover current, accurate estimated acquisition costs in a useful format for BMS drugs.

For example, with regard to her understanding of AWP, former, long-time DPW employee Suzanne Love, who had significant involvement in pharmaceutical reimbursement, testified as follows (with emphasis added):

Q. Okay. Was it also your — do you agree with the description in this proposed regulation that AWP is a misnomer? It is actually the manufacturer’s suggested list price?

A. It was my understanding that the AWP received from the pricing service was determined by the manufacturer.

[[Image here]]

Q. ... You used AWP throughout your time at DPW, correct?

A. Yes.

Q. Did you understand it to be an actual average of wholesale prices?

A.

It was always my understanding that the AWP that was reported by our pricing service represented the price identified by the manufacturer. It was my understanding that that was not the actual price that the pharmacist purchased the drug.

Q. Okay. Now, do you have a—

A.

But I didn’t have anything to prove that.

Q. Didn’t have anything to prove what?

*1246

A.

That it wasn’t the actual price that the pharmacist paid.

Q. Okay. Did

you

— how

did you obtain the understanding that it

— that

the published AWP was not the price that the pharmacist paid?

A.

Day-to-day discussions, rumors, things like that.

Q. With whom?

A. Pharmacists, the pharmacy association.

N.T., 8/26/10, at 2420-21. Further, with regard to her understanding of WAC/ WLP, Love testified (with emphasis added):

Q. ...

You knew at this time that the WAC, the published WAC was closer to the pharmacists’ actual acquisition cost than the published AWP, isn’t that correct?

A.

It’s hard for me to say that I knew this. I mean, you hear these things in discussions, you read articles here and there that suggest that it would be closer.

Q. All right. I didn’t mean that you had a moral certainty. I just meant that you had some sort of information that would suggest to you that WAC would be closer to actual acquisition cost than—

A. I had — I’m sorry.

Q. I guess you can finish. Go ahead, answer.

A. I didn’t mean to interrupt. I,

I had anecdotal information that it was closer to actual acquisition cost.

N.T., 8/26/10, at 2472.

In addition, as to her knowledge of the various pricing benchmarks, Dr. Terri Cathers, Director of Pharmacy for the Fee-for-Service Program of DPW’s Office of Medical Assistance Programs testified (with emphasis added):

Q. Now I want to talk about up through 2008. Can you tell the jury about your understanding of AWP while you were with Pennsylvania Medicaid up through 2008. What was your understanding of AWP?

A.

Well AWP is

— is

not easily understood. I mean we’ve seen AMP today, we’ve seen WAG today, we’ve heard about actual acquisition cost, and we’ve heard about AWP.

But I don’t

— I

don’t know what any of these prices actually mean, where they come from, and I don’t know anybody who does, other than the manufacturers who have to have some sort of method for coming up with these prices. But that’s unknown to all of us.

Q. Okay. And it has been?

A.

Absolutely. It has been unknown as

— forever.

Q. Okay. But there was a suggestion in this case that, you know, some of the manufacturers may hand over a WAC. If some — if a manufacturer — first of all, how many manufacturers do you deal with?

[[Image here]]

A. ... Over 300.

Q. Okay. And we already said there’s 25,000 different drugs?

A. Yes.

Q. 30,000 claims a day?

A. Yes.

Q.

Okay. So if one of these manufacturers or a couple of them gave you a paper of WAG, what their WAC was, could you

— what

could you do with that information?

A.

Nothing. By the time the paper reaches my desk it’s potentially old data, and what is a piece of paper going to do for a large computer infrastructure that requires system coding to look at a claim when it comes in and pay it appropriately. It would not be efficient, it would not be accurate, and it would not be timely.

*1247

Q. Okay. So it wouldn’t be accurate. Would it be current?

A. It would not be accurate, timely—

Q. It wouldn’t be current, right?

A. Right.

Q. And it wouldn’t be efficient?

A. That’s right.

[[Image here]]

Q. Okay.

Are you privy to AMP, or is that a secret figure?

A.

Oh, that’s very secretive. Only CMS and the manufacturers have access to the AMP. The state Medicaid programs do not see that price nor is it made available publicly.

[[Image here]]

Q. Okay. Did Pat DeHart [who worked in BMS’ state government affairs department] ever offer to show you ASP?

A.

No.

And in fact I had asked about the pricing, and I don’t — she brought like some glossy card. She didn’t leave it with me.

It gave me zero information.

There was nothing that on there said, oh, yeah, this drug is so high cost because it was — whatever. There was no explanation. So I was like, okay. Well, you know, just another empty request.

[[Image here]]

A.

AMP is calculated by the drug manufacturers, and it is what the wholesaler would pay to the manufacturer for the drug. It is not acquisition cost for the pharmacies to buy the drug. AMP has nothing to do with the pharmacy’s ability to buy the drug or the price at which the providers would pay.

And AMP ... it definitely did not increase at the same rate as the AWP. And obviously that’s by design. Because if the manufacturer is paying rebates against AMP, well, wouldn’t you want AMP to be lower so you don’t pay higher rebates? It seems to make sense to me if I were them.

N.T., 8/24/10, at 2023-24, 2027, 2037, 2041.

Further, although much of his testimony was rejected, Thomas Snedden, Director of PACE, provided the following credible testimony regarding pricing (with emphasis added):

Q. What would you like to pay?

A.

I’d like to pay whatever the price is that pharmacists are paving for the product.

And that price can vary, depending on whether it’s independent pharmacy, chain pharmacy, institutional pharmacy, nursing home pharmacy, and then pay them a fair and reasonable fee to dispense that medication over and above the price that they pay for the medication.

Q. So do I have it right you would like to pay the actual price paid by the pharmacists and then pay them a dispensing fee?

A.

Yes. We call it the actual acquisition cost.

Plus a dispensing fee.

Q.

Have you ever had success getting the actual acquisition cost getting paid by the reimbursement program?

A.

Not for the PACE program.

[[Image here]]

Q. So does PACE get AMP data from the manufacturers?

A. Yes, we do.

Q. You get it pursuant to that contract they sign?

A. Pursuant to the statute and the contract, yes.

Q. And what does the contract say to PACE about what you can do with those AMPs?

A. The statute and the contract require us to keep that data confidential.

Q.

Can you use that data for reimbursement?

*1248

A.

No.

Q. Have you always kept that data confidential?

A. Very much so.

[[Image here]]

Q. Why do you want to know real prices?

A.

I want to make sure the program is reimbursing fairly to providers so that they take good care of the PACE enrollment.

Q.

Have you ever gotten real transaction pnces from any drug manufacturer?

A.

Not outside ofAMPs.

Q.

Have you ever gotten any from BMS?

A.

No.

Q.

You said not outside of AMPs. That’s the calculated price that they created?

A. Right. Right.

[[Image here]]

Q.

Have they shown you any real transaction prices to any customer?

A.

No.

N.T., 8/24/10, at 1915, 1921, 1925-26 (emphasis added).

Thus, the testimony of DPW and PACE witnesses revealed that even if they had some anecdotal information about the various pricing values used in the pharmaceutical industry, they did not have sufficient information to accurately estimate provider acquisition costs for BMS’ branded drugs. Further, while the testimony of these witnesses reveals they had some knowledge that AWP was a flawed value, their believable testimony also shows they did not fully understand the extent of the inaccuracy for the branded drugs at issue here.

See, e.g.,

N.T., 8/31/10, at 3031 (Radke) (explaining he was unaware that manufacturers had a formula for computing AWP).

Additionally, these witnesses never testified they knew that WAC/WLP represented a price that providers actually paid for BMS drugs, and, in any event, there was credible evidence that providers paid less than WAC/WLP. N.T., 8/16/10, at 762-70; PX-8962, PX-8963 (Comanor). In sum, the testimony of the DPW and PACE representatives shows that, although they knew problems existed within the AWP-based reimbursement system, it is also clear that substantial confusion existed, such that these witnesses lacked an awareness of the actual average of wholesale prices for specific BMS branded drugs.

21

The trial judge rejected BMS’ assertion that it had an inferior understanding about actual provider acquisition costs for its branded drugs. Instead, the trial judge determined BMS had vastly superior knowledge regarding the pricing environment for its drugs, including the reimbursement component of the pricing environment.

See

PX-491 (BMS June 2002 presentation on “Average Wholesale Price (AWP)”); PX-375, also identified as Bates # BMS 1237476 (1999 PowerPoint presentation by consulting firm Charles River Associates to BMS executives regarding marketing of BMS drug Paraplatin), N.T., 9/1/10, at 3217-3224 (description of PX-375 by Bell);

see also

PX-8951 (BMS company e-mail indicating BMS “understood the different [pricing] policies they could adopt. They could adopt a policy which says low AWP, keep the prices stable and not pay much rebates.

And an alternative is the last one, high AWP I aggressive rebates. And that was the choice.”)

N.T., 8/16/10, at 756-59 (Comanor describing PX-8951).

*1249

Evidence to the contrary was rejected as less credible.

iii.OIG Reports, Surveys and Price Audits

More importantly, the OIG reports, surveys and price audits upon which BMS relies are not communicated to the Plaintiff Agencies in a format suitable for use with the tens of thousands of computer-based claims submitted to the Plaintiff Agencies each day. In other words, unlike the price information purchased from the pricing compendia, the OIG reports, surveys and price audits are not automatically updated to be current, and they are not provided in a digital format. Instead, information in the OIG reports, surveys and price audits are static, stale, and analog-style.

In addition, testimony revealed that the OIG reports and audits available to DPW and PACE are of limited value to these agencies in assisting them in ascertaining current provider acquisition costs for BMS branded drugs in Pennsylvania. Specifically, the OIG reports were based on national surveys, which did not include Pennsylvania; therefore, these reports were of limited value to Agency employees in attempting to determine the prices paid for drugs by other third-party payors in Pennsylvania. The trial judge also afforded little weight to these reports because they: (1) lacked clarity as to whether the reports included BMS branded drugs; (2) appeared to have included generic drugs, which have much higher spreads than branded drugs, and which were not at issue in this case; (3) reported varying percentages off AWP, making it difficult to gain clarity as to what figure represented an actual average of wholesale prices; and (4) did not cover all the drugs in the case. Also, while the Plaintiff Agencies have the authority to conduct audits, the limited resources of these agencies, coupled with the limited useful information provided, greatly restricted the practical value of these audits. N.T., 8/24/10, at 1923-25 (Snedden); 2058-60, 2075-76, 2110-12 (Cathers). Further, while BMS often referred to the PriceWaterhouseCoopers study, the value of the findings produced by this study were also limited because of the study’s self-recognized limitations.

See

DX-514 at p. 7.

iv.AMPs and ASPs

As to the AMPs, these are values calculated by the drug manufacturers which are not based on prices paid by providers; rather, AMPs are based on prices paid by wholesalers. N.T., 8/24/10, at 2041 (Cath-ers). AMPs are used for rebates, not for reimbursement.

See id.

Moreover, the underlying data is not shared with the Plaintiff Agencies.

Id.

at 2027 . AMP data cannot be used for reimbursement. N.T., 8/24/10, at 1921 (Snedden).

Regarding the ASPs available for download on the internet since 2005, BMS does not contend, nor can it contend, that these prices are available for

all

of its branded drugs. These prices are available only for Medicare Part B drugs administered by a physician. There is no believable evidence in this case that digital, downloadable ASPs are available for each of the self-administered drugs which comprise the bulk of the drugs addressed in this trial.

v.Conclusion

In sum, like Judge Saris in

MDL 2007,

the trial judge determined the limited government knowledge in this case does not exonerate BMS.

See MDL 2007,

491 F.Supp.2d at 94 . Instead, similar to Judge Saris, the trial judge determined that BMS contributed to the publication of false AWPs for its branded drugs, knowing the government did not understand the extent of the spread between published prices and true average provider acquisition costs.

Id.

*1250

Moreover, like Judge Saris in

MDL 2007,

the trial judge determined that BMS knew that the Plaintiff Agencies could not do much to change the reimbursement benchmark because they were locked into a reimbursement regime established by statute or formal regulation.

Id.

at 94-95 ; N.T., 8/16/10, at 687-88, 703-04 (Coma-nor);

see also Alpharma USPD, Inc.,

slip op. at 4 (denying post-trial motions of drug manufacturer found guilty of violating consumer protection statute by manipulating AWPs; rejecting “government knowledge” and “government choice” arguments; “The civil servants who administered the Medicaid program during the relevant time frame came and went, and each had a differing level of knowledge, understanding and experience with regard to the application of these administrative regulations. Nevertheless, once the state’s administrative regulation was adopted that required reimbursement based on the AWP reported by the manufacturer, the state was not free to disregard AstraZeneca’s AWP.”).

Thus, public payors like DPW and PACE are less “nimble” than private pay-ors such as pharmacy benefits managers, when it comes to their ability to change reimbursement rates. N.T., 8/16/10, at 687-88, 708-04 (Comanor). BMS’ conduct exploited the flaws inherent in this system, which discriminates against public payors.

Id.

at 695, 721, 741, 756-61

Also, the trial judge determined that in Pennsylvania the level of reimbursement and the continuing reliance on formulae based on some form of AWP were the result of several factors: confusion over AWP; lack of a better proxy for provider acquisition costs; and, an inflexible reimbursement system where changes to laws and regulations came slowly, if at all.

Finally, the language of the proposed injunction against BMS can be tailored to conform to the language in the order granting injunctive relief against Johnson & Johnson Defendants. Such a modification would require BMS to arrange for the transmission to DPW and PACE of current, accurate estimated acquisition costs, such as AMPs or ASPs, for each of its branded drugs, in a format equivalent to that in which AWPs are reported to DPW or PACE, or in another format acceptable to DPW and PACE. With this modification, the injunction will have the effect of conveying accurate estimated cost information so that DPW and PACE no longer need to speculate regarding estimated acquisition costs, a target for which they must aim under federal law.

4. Alleged Harm Compensable by Monetary Damages

a. Contentions

BMS further argues whatever hypothetical harm the Commonwealth might suffer in the future could be compensated by money damages. In fact, BMS contends, the Commonwealth sought monetary damages; as such, it asserts, injunctive relief is inappropriate here.

b. Analysis

BMS did not invite the fact-finder to consider this contention at any time during trial.

See

N.T., 9/9/10, at 3890-92 (closing on CPL claim). Accordingly, it is waived.

Even on the merits the contention fails. As with several of its other arguments, BMS’ assertions on this point are improperly premised on the common law standards for injunctive relief rather than on the statutory scheme at issue here. As explained above, as the primary remedy in an enforcement action by the Attorney General, the CPL contemplates an action for temporary or permanent injunctive relief to restrain CPL violations. 73 P.S. § 201-4. Further, the plain language of the CPL states, whenever a court issues a

*1251

permanent injunction, it may order restoration.

See

73 P.S. § 201-4.1. Thus, under the CPL, the grant of injunctive relief is a prerequisite to an award of restoration of money in a suit by the Attorney General. In other words, the statutory remedies are not mutually exclusive; rather, they are primary and secondary.

More particularly, Section 4.1 of the CPL states:

Whenever any court issues a permanent injunction to restrain and prevent violations of this act as authorized in section U above,

the court may in its discretion direct that the defendant or defendants

restore

to any person in interest

any moneys

or property, real or personal, which may have been acquired by means of any violation of this act, under terms and conditions to be established by the court.

73 P.S. § 201^.1 (emphasis added).

Based on a “plain meaning” interpretation of Section 4.1 of the CPL, a court may only order restoration when it grants a permanent injunction to prevent violations of the CPL as authorized in Section 4. BMS’ arguments do not acknowledge the CPL’s statutory scheme. BMS’ contentions are improperly premised on the common law standards for a grant of injunc-tive relief, which are inapplicable here. Thus, BMS’ arguments fail.

E. Alleged Lack of Clear Right to Relief

BMS next contends the Commonwealth did not demonstrate a clear right to relief. In support, it advances five contentions: (1) the trial judge’s Decision is inconsistent with the jury verdict; (2) BMS’ conduct is not fraudulent or deceptive; (3) the trial judge’s decision is inconsistent with the

MDL 2007

decision; (4) there is no proof of causation because pharmacies were not overpaid; and, (5) there is no proof that supports an injunction against marketing the spread.

These contentions appear no different than BMS’ initial challenge to the sufficiency of the evidence supporting an injunction. With an eye to completeness, however, we will address them again in more detail.

1. Alleged Inconsistency with Jury Verdict

a. Contentions

BMS asserts the trial judge found BMS’ conduct was “unfair or deceptive;” however, the trial judge did not explain his decision. Moreover, BMS contends that there is no basis on which the Court could conclude the Commonwealth demonstrated a “clear right to relief’ as required for issuance of an injunction.

BMS argues the only viable “unfair or deceptive practice” at issue here is the CPL’s catchall provision. It asserts the provision only applies to instances of fraud or deception, not unfairness.

See

73 P.S. § 201-2(4)(xxi).

22

BMS observes that some uncertainty exists in the case law as to whether the General Assembly’s addition of the term “deceptive” to the catchall provision in 1996 eliminates the need to prove every element of fraud. Specifically, BMS points out the Superior Court requires proof of fraud when establishing a CPL catchall claim, while the Commonwealth Court

*1252

does not.

Compare Booze v. Allstate Ins. Co.,

750 A.2d 877 (Pa.Super.2000) (private action)

with Commonwealth by Corbett v. Manson,

903 A.2d 69 (Pa.Cmwlth.2006) (action in the public interest). In any event, BMS contends, this Court never held reliance is not required.

BMS further notes that in

Manson ,

this Court “applied the more relaxed standard, but only to establish that the word ‘deceptive’ included a ‘should have known’ negligence standard.” BMS’ Br. at 25-26. BMS argues the jury here applied this standard when it rejected the Commonwealth’s negligent misrepresentation claim. In fact, it contends the trial judge recognized this fact at argument on the CPL claim. As a result, BMS asserts the jury’s verdict in its favor on the negligent misrepresentation claim bars the Commonwealth from recovering on its CPL claims under principles of collateral estoppel and

res judicata.

BMS further argues, even if the i'eliance requirement is relaxed in an enforcement action by the Attorney General, the Commonwealth’s claim is still barred because BMS defended on grounds other than reliance in presenting its case to the jury. Among other things, BMS notes, it argued it should not be found liable because it only reported truthful prices, and there was sufficient record evidence for the jury to decide the case on that basis. BMS maintains the Court cannot assume the jury decided in favor of BMS based solely on the reliance element, as opposed to whether there was even an initial misrepresentation.

BMS cites several cases, including

Beckert v. Warren,

497 Pa. 137 , 439 A.2d 638 (1981) and

Beacon Theatres, Inc. v. Westover,

359 U.S. 500 , 79 S.Ct. 948 , 3 L.Ed.2d 988 (1959), in support of its contention that where, as here, there is a trial involving both legal claims and equitable claims, the legal claim should be decided first and the adequacy of the relief it provides assessed.

BMS further asserts that the jury’s findings are dispositive on factual issues common to the legal and equitable issues in order to avoid producing an inconsistent result and to protect the right to a jury trial.

See, e.g., Wade v. Orange Cnty. Sheriffs Office,

844 F.2d 951 , 954 (2d Cir.1988). BMS argues the trial judge is not free to disregard the jury’s determination of the legal claims when issuing a subsequent ruling on any equitable claims. It asserts this is particularly true where, as here, the Commonwealth objected to a special verdict on the elements of the legal claim, and the trial judge sustained that objection.

In sum, BMS argues the trial judge’s disregarding of the jury’s verdict would deprive BMS of its constitutional right to a jury trial under the Pennsylvania Constitution,

see

PA. Const, art. 1, § 6, and would violate principles of

res judicata

and collateral estoppel.

b. Analysis

At the outset, we acknowledge BMS’ point that the Commonwealth initially based its CPL claims on four alleged unfair or deceptive practices aside from its claim under the catchall provision. BMS argues none of these other subsections apply here. In fact, at closing argument on the statutory claims, BMS argued the Commonwealth did not offer evidence in support of the four subsections other than the catchall. N.T., 9/9/10, at 3883-84. In its rebuttal, the Commonwealth did not contest BMS’ assertion. Further, in its brief in opposition to BMS’ post-trial motions, the Commonwealth does not refute this assertion; rather, it focuses its discussion on the applicability of the catchall provision. Thus, we agree with BMS that the Commonwealth abandoned any CPL

*1253

claims other than those that fall within the catchall provision.

As to the merits, there is no inconsistency between the jury’s verdict and the trial judge’s determinations under the CPL. The jury answered “no” when asked whether BMS was liable for negligent misrepresentation, Question 1.

See

Attachment A. The jury also answered “no” when asked whether BMS was liable for fraudulent misrepresentation, Question 3.

Id.

The jury did not answer any other questions. Thus, the jury did not answer any questions regarding causation, conspiracy, amount of financial harm or liability for outrageous conduct, Questions 2, 4, 5, 6, 7, and 8.

Id.

Further, the jury was not asked to decide, and did not decide, the factual issues in the Commonwealth’s CPL claim.

Id.

The test for deceptive conduct under Section 2(4)(xxi) of the CPL is essentially whether the conduct has the tendency or capacity to deceive, which is a lesser, more relaxed standard than that for fraud or negligent misrepresentation.

Commonwealth ex rel. Corbett v. Peoples Benefit Servs., Inc.,

923 A.2d 1230, 1236 (Pa.Cmwlth.2007);

Manson .

In short, the Commonwealth must establish the acts or practices are capable of being interpreted in a misleading way.

Peoples Benefit Sens.

Here, the trial judge determined that AWP is a fictitious price that can mislead both ordinary and sophisticated consumers as to the actual acquisition cost for the branded drugs at issue. Moreover, as discussed elsewhere, the record is clear that significant confusion existed regarding the use of the AWP in the reimbursement system.

Thus, regardless of the jury’s verdict on liability for misrepresentation, the trial judge could find in the CPL action that BMS engaged in “deceptive conduct [fictitious or deceptive pricing scheme] which creates a likelihood of confusion or of misunderstanding” within the meaning of Section 2(4)(xxi) of the CPL (catchall provision).

See In re Pharm. Indus. Average Wholesale Price Litig. (MDL 2010 )

738 F.Supp.2d 227 (D.Mass.2010) (in states where consumer protection statutes prohibit deception only,

including Pennsylvania,

a fact-finder may well conclude that contributing to inflated, fictitious AWPs to circumvent changes in reimbursement constitutes “deceptive conduct”).

Also, in awarding a permanent injunction in the public interest under Section 4 of the CPL, the standard to be applied by the court is different from the standard applied in a private action for damages under Section 9.2 of the CPL,

23

or a common law action for fraudulent or negligent misrepresentation.

See Weinberg

(private actions under Section 9.2 of the CPL distinguished in

dicta

from enforcement actions by the Attorney General under Section 4 to restrain unlawful conduct). In

Weinberg ,

the Supreme Court determined a private plaintiff, who was not actually deceived or influenced by a defendant’s false advertisement, cannot recover under Section 9.2 of the CPL on the ground that the false advertisement might deceive a substantial segment of the public. The more relaxed standard applies only in enforcement actions by the Commonwealth on behalf of the public interest under Section 4 of the CPL.

Id.

Regardless of the effect of the Supreme Court’s decision in

Weinberg ,

this Court interpreted the “catchall” language in Section 2(4)(xxi) of the CPL on several occasions. In

Commonwealth v. Percudani,

825 A.2d 743 (Pa.Cmwlth.2003)

(Percudani

I), this Court determined the General Assembly’s addition of the language “or deceptive conduct” signaled an approval of a

*1254

less restrictive interpretation of the catchall provision; thus, the Commonwealth need not prove the common law elements of fraud to establish a violation of the catchall provision.

In

Manson ,

which followed

Percudani I,

this Court recognized the test for deceptive conduct under Section 2(4)(xxi) of the CPL “is whether the conduct

might be deceptive to the ordinary consumer, a lesser offense than fraudulent conduct... Manson,

903 A.2d at 74 (emphasis added);

see also Peoples Benefit Servs.

(an act or practice is unfair or deceptive if it has the capacity or tendency to deceive; neither the intention to deceive nor actual deception need be established. Rather, the plaintiff needs only to show the acts or practices are capable of being interpreted in a misleading way). These cases have the effect of eliminating the common law state of mind element (either negligence or intent to deceive), and of softening or eliminating the common law reliance and causation elements implicated in actual deception.

Further, in

Pennsylvania Department of Banking v. NCAS of Delaware, LLC,

995 A.2d 422 (Pa.Cmwlth.2010)

(en

banc), this Court cited

Percudani I

and

Peoples Benefit Services,

and we determined the Attorney General sufficiently stated a claim for deceptive conduct under Section 2(4)(xxi) of the CPL against the defendants, operators of cash advance centers in Pennsylvania. More specifically, the Attorney General averred the defendants offered a loan product (line of credit) to Pennsylvania consumers at an excessive rate of interest. Although the loan product appeared to charge simple interest on the cash advances that corresponded to an annual percentage rate of 5.98%, the added monthly participation fee of $149.50 essentially resulted in a “real interest rate” of 368%.

In

NCAS,

this Court again observed neither intention to deceive nor actual deception must be proven; and, it need only be shown that the acts or practices are capable of being interpreted in a misleading way. “The test for the court is to determine the overall impression arising from the totality of what is said, as well as what is reasonably implied.... ”

NCAS,

995 A.2d at 444 (quoting

Peoples Benefit Sens.,

923 A.2d at 1236 ).

Additionally, in

Seldon v. Home Loan Services, Inc.,

647 F.Supp.2d 451 (E.D.Pa. 2009), the U.S. District Court for the Eastern District of Pennsylvania predicted the Pennsylvania Supreme Court would conclude that a plaintiff alleging deceptive conduct under the catchall provision in Section 2(4)(xxi) of the CPL need not allege the elements of common law fraud.

See id.

at 468-70 .

As a result of the foregoing, it is clear that even if the jury found that BMS did not make a misrepresentation, the jury was not asked to find (and could not find without instructions) whether BMS engaged in deceptive conduct under the CPL. This is a different standard.

Peoples Benefit Servs.; Manson; Percudani I.

Thus, the jury verdict does not preclude a finding of deceptive conduct by the trial judge on the statutory claims.

As a further result of the foregoing discussion, it is clear that the state-of-mind elements necessary for a common law misrepresentation claim are not prerequisites for a statutory claim under the CPL catchall provision. Therefore, any jury decisions in favor of BMS on state-of-mind elements are irrelevant to the CPL claim.

Also, BMS’ conduct was material, as it impacted a nonmalleable reimbursement system to which the Plaintiff Agencies were chained by statute and regulation. Stated differently, because the Plaintiff Agencies were required by law to reim

*1255

burse according to some form of AWP, deceptive conduct as to that value was material as a matter of law, regardless of the jury verdict.

Additionally, the jury verdict does not preclude the trial judge’s findings regarding reliance. The CPL does not expressly require proof of reliance. Also, the recent cases in this area compel the conclusion that in an action in the public interest under the catchall provision of the CPL, either there is no reliance element, or it is softened from the common law reliance standard.

Id.; see also MDL 2007.

Therefore, even assuming the jury found there was no reliance (as that term was defined in instructions), it would not preclude a different determination by the trial judge on the statutory claim.

Further, the Commonwealth proved that BMS’ actions caused it to overpay for BMS’ branded drugs. As discussed elsewhere, the trial judge accepted the opinion of the Commonwealth’s liability and causation expert, Dr. Comanor, on this element. The jury did not answer any question regarding causation, so the trial judge’s determination cannot be in conflict with the verdict.

Finally, while BMS correctly contends that legal matters must be determined prior to equitable matters,

Beacon Theatres; Beckert,

as discussed above, the issues considered by the jury were distinct from the CPL claims considered by the trial judge. Therefore, the jury verdict on common law claims has no preclusive effect on the statutory claims, and there is no affront to BMS’ constitutional right to a jury trial.

2. Alleged Lack of Fraudulent or Deceptive Conduct

a. Contentions

BMS next asserts, even if the issue of deceptive conduct was not conclusively decided by the jury, there is no basis for the trial judge to find BMS acted deceptively. BMS contends the issue of whether conduct is fraudulent or deceptive cannot be determined in a vacuum. It points out that Pennsylvania, like most states, looks to FTC policies and decisions to assist in interpreting the CPL.

Monumental Props.

BMS notes the FTC, in its Policy Statement on Deception, states: “If a representation or practice affects or is directed primarily to a particular group, the [FTC] examines reasonableness from the perspective of that group.” Federal Trade Comm’n polioy statement on Deception (1983) (Appended to

In the Matter of Cliffdale Assocs., Inc.,

103 F.T.C. 110 (1984)).

Here, it argues, the Commonwealth had to show persons at DPW and PACE who were responsible for making reimbursement decisions would reasonably believe that AWP was an indication of actual acquisition cost.

See Arizona Cartridge Remanufacturers Ass’n., Inc. v. Lexmark Int’l Inc.,

290 F.Supp.2d 1034 (N.D.Cal.2003). BMS contends no witness from DPW or PACE testified they thought AWP was an acquisition cost during the relevant’time period, much less at the time to which the injunction applies.

b. Analysis

BMS’ arguments fail. Clearly, BMS engaged in or contributed to a scheme of fictitious or deceptive pricing, which falls under the CPL’s catchall provision. Indeed, BMS does not seriously dispute that essentially no one paid the fictitious AWPs for BMS drugs.

In addition, while the testimony of the DPW and PACE witnesses reveals they had some knowledge that AWP-based reimbursement was flawed, their testimony also shows substantial confusion over AWP. Thus, they did not understand the extent of the inaccuracy, they did not have

*1256

a better proxy for estimated provider acquisition cost, and they were chained to an AWP-based reimbursement system by law. The trial judge’s determinations in this regard are consistent with those of other courts dealing with AWP litigation.

MDL 2007; Alphamia USPD, Inc.

Also, BMS’ conduct did not affect just “sophisticated” reimbursement professionals at DPW and PACE. Rather, it also affected reasonable consumers, such as Medicare Part B drug recipients who paid co-payments of 20% of AWP-based reimbursement price.

See MDL 2007,

491 F.Supp.2d at 33 ,

citing

42 U.S.C. § 13951

Further, even accepting BMS’ intended target audience argument,

see Arizona Cartridge

(where alleged deceptive business practice is targeted to sophisticated purchaser, question of whether it is misleading will be viewed from vantage point of members of targeted group), this does not alter the conclusion that BMS’ conduct was deceptive to the audience. To that end, several other groups involved in buying, selling, and reimbursing pharmaceuticals must also be included in this audience. More particularly, it is appropriate to include BMS employees and corporate officers charged with setting the company’s prices. It is also appropriate to include others involved in the establishing drug reimbursement formulae, such as legislators and regulators at IRRC. A target audience would also include providers, such as pharmacy benefit managers, pharmacists and doctors. Because the record reveals confusion among most of these groups, a determination of deception is still appropriate even if the audience is not viewed as simply the “reasonable consumer.”

See, e.g.,

N.T., 8/19/10, at 1418, 1460-62 (testimony of Rose Crane, former BMS President of U.S. Primary Care, regarding her belief that AWP was a price paid by wholesalers); N.T., 8/11/10, at 324 (testimony of Paul Norris, BMS’ Regional Business Director for the Northeast Region, Oncology Division, that BMS employees within the global marketing organization believed that AWP was “representative of the price that we sold the product.”); N.T., 8/23/10, at 1656-57, 1663 (testimony of BMS Vice President of Federal Government Affairs Michael Carozza referring to PX-777, which included testimony of oncologist Dr. Harvey Golomb before Congressional committee stating that oncologists “routinely pay full AWP for drugs”),

id.

at 1771 (Carozza referring to PX-413, which related to U.S. Senate Finance Committee’s lack of knowledge of markup used to arrive at AW/P),

id.

at 1790-92 .

3. Alleged Inconsistency of Decision with

MDL 2007

Opinion

a. Contentions

BMS next argues the trial judge relied on the

MDL 2007

decision in concluding BMS’ conduct was unfair or deceptive. However, the trial judge overlooked that part of Judge Saris’ decision where she found spreads of 30% or less were not unfair or deceptive, taking into account, “all the facts and circumstances to determine whether the statutory violation involves unfair or deceptive conduct.”

MDL 2007,

491 F.Supp.2d at 83 . BMS contends Judge Saris found no liability for spreads of 30% or less because “it is undisputed that the market understood and expected a 20 to 25 percent formulaic markup from WAC to AWP.”

Id.

at 91 .

BMS maintains the undisputed record of “government knowledge” here is even more compelling than the record knowledge in the

MDL 2007

decision. It argues, not only did the Commonwealth know the difference between WAC and AWP, but DPW now uses WAC in its reimbursement formula. BMS contends that while it disagrees with much of Judge Saris’ opinion in

MDL 2007,

there is no

*1257

principled basis under which the trial judge could rely on that opinion, but selectively reject what Judge Saris called her “30 percent speed limit.”

Id.

at 95 .

In connection with the jury instructions, BMS further asserts that the trial judge relied on Judge Saris to apply a plain meaning interpretation to the DPW regulation and the PACE statute to instruct the jury that AWP means an average price that a wholesaler charges a retailer. However, BMS argues, the issue before Judge Saris was whether AWP in the Medicare statute should be interpreted without reference to the way that term is used by the pricing services. BMS maintains the explicit references to AWP in the “pricing services” in the Pennsylvania statute and regulation bar a plain meaning interpretation here.

BMS also argues that even if a plain meaning interpretation is applied, it does not follow that any AWP that exceeds acquisition cost is deceptive or unfair. It points out that Judge Saris found that spreads less than 80% were not deceptive or unfair notwithstanding her plain meaning interpretation of the Medicare statute.

Id.

at 97 . BMS maintains she found that whether an AWP was deceptive or unfair depended on what people understood, not the statutory definition.

BMS contends that if the 30% “speed limit” is applied here, there can be no liability under the CPL for any self-administered drugs because it was undisputed that self-administered drugs were sold at list price, which is always within 30% of AWP. It asserts the Commonwealth’s witnesses Gregory Hamilton and Dr. Coma-nor admitted this fact. BMS argues its expert, Dr. Gregory Bell, further showed this fact through a detailed statistical analysis that the Commonwealth did not challenge.

BMS maintains the Commonwealth also conceded the point relating to self-administered drugs at oral argument on the statutory claim, but nevertheless contended that “injectables” exceeded the 30% limit. It argues Dr. Bell testified that injectables (Medicare Part B pharmaceuticals) were less than 1% of the claims, and the Commonwealth’s counsel conceded that they were less than 2%. Needless to say, concerns surrounding less than 2% of all claims do not provide a “statutory basis” for issuing an injunction regarding all AWPs.

Furthermore, BMS asserts there is no systematic proof of what the spreads were for Medicare Part B pharmaceuticals. BMS contends Dr. Warren-Boulton assumed all drugs, including injectables, were acquired at WAC + 2%, which would result in spread of less than 30%. In addition, as noted, BMS reported the ASPs of all injectables to CMS, which publishes them on the internet, since 2004.

b. Analysis

We reject BMS’ assertion that the Decision is inconsistent with the decision in

MDL 2007

because the trial judge chose to ignore the 30% “speed limit” portion of Judge Saris’ opinion. In short, BMS did not present credible expert testimony that a 30% “speed limit” was appropriate here. Thus, because the record on liability and causation in this case differs from the record in

MDL 2007

in that regard, there is no inconsistency between the decisions.

Like Judge Saris, the trial judge concluded the fact that Pennsylvania was slow to change its reimbursement system does not negate causation.

MDL 2007,

491 F.Supp.2d at 96 . On causation of harm, however, the trial judge received different evidence than that submitted to Judge Saris. Here, evidence established that the Plaintiff Agencies were harmed not by so-called “mega-spreads” on Medicare Part B drugs, but by enhanced price discrimina

*1258

tion by the drug manufacturers on

all

branded drugs, credibly characterized as “egregious” by the Commonwealth’s liability and causation expert, Dr. Comanor. N.T., 8/16/10, at 761. The enhanced price discrimination took the form of different pricing/rebate schemes for public and private payors resulting in public payors, such as the Plaintiff Agencies, paying more than private payors.

Id.

at 756-62.

In addition, BMS’ reliance on the testimony of its expert, Dr. Bell, is inappropriate. This is because the trial judge expressly rejected that testimony. Decision of September 10, 2010, n. 2 (“The Court accepts as credible only that part of the testimony of Gregory K. Bell, Ph.D., that the damage estimates of Dr. Warren-Boul-ton are inflated by the inclusion of drugs not in this case.”). BMS fails to explain its reliance on testimony it knows has been rejected.

Further, we reject BMS’ contentions that the trial judge erred in applying a plain meaning approach to his construction of the relevant statute and regulation. The trial judge recently explained his plain meaning analysis in an opinion resolving a motion

in limine

filed by Johnson & Johnson Defendants. He explained, in relevant part:

Through its motion, Johnson & Johnson Defendants ask this Court to revisit its construction of the term AWP as explained to the jury in the first trial in

Commonwealth v. TAP Pharmaceutical Products, Inc.,

which involved Defendant [BMS]. In arriving at a plain meaning interpretation, this Court relied, in part, on the opinion of U.S. District Court Judge Patti B. Saris in

[MDL 2007],

and on an earlier decision in the same case reported at 460 F.Supp.2d 277 (D.Mass.2006)

{MDL

2006).

Johnson & Johnson Defendants take issue with this Court’s reliance on Judge Saris’ opinion because in the case before her, Judge Saris was interpreting the federal Medicare statute; here, however, the Court is construing Pennsylvania law. Johnson & Johnson Defendants assert that Pennsylvania law defines AWP with reference to the national pricing compendia, which [DPW and PACE] knew differed from average transaction prices.

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Mindful of the evidence presented at the first trial involving BMS, the Court concludes that those writing

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