Sanofi agrees to pay $2.4M to Zaltrap sales reps in fight over discounted commissions

A cadre of Sanofi's ($SNY) sales reps will collect a few thousand dollars each from the company, thanks to a proposed legal settlement in a class-action lawsuit over Zaltrap commissions. The French drugmaker's U.S. unit agreed to pay $2.4 million to wrap up the lawsuit, filed after Sanofi cut the price of the colon cancer drug and reduced reps' incentive pay, the New Jersey Law Journal reports.

The legal claims stemmed from a pricing controversy that went public in autumn 2012. Doctors at Memorial Sloan-Kettering Cancer Center wrote a New York Times op-ed about cancer drug costs, singling out Zaltrap. The doctors said they'd agreed not to prescribe the Sanofi treatment because it was more expensive--and no more effective--than older treatments like Roche's ($RHHBY) Avastin. Soon after, Sanofi boosted Zaltrap rebates, effectively cutting the price by 50%.

According to the sales reps' lawsuit, Sanofi set incentive pay based on the number of vials sold. After Sanofi decided to offer discounts to prescribers, the company told reps it wouldn't cut per-vial compensation rates, the lawsuit claims. But in March 2013, Sanofi told reps that it would not pay the promised rates, the reps said.

Now, after mediation with the plaintiffs, Sanofi has asked U.S. Judge Peter Sheridan to approve a $2.4 million deal. That amount would include legal fees of up to $800,000, plus settlement costs of around $10,000, and $25,000 each for the individual salespeople who brought the suit. Some 114 reps would be eligible for a share of the settlement; the class includes all current and former employees eligible to receive compensation for marketing Zaltrap during the last half of 2012.

- see the NJ Law Journal story

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