STATE OF IDAHO OFFICE OF THE ATTORNEY GENERAL

drug manufacturers reported falsely inflatedtaxpayersaverage wholesale prices, which resulted in thesettlements alsoState of Idaho paying health care providersGeneral his fees and costs in pursuing the cases.millions of dollars more than they should haveforThetheirinflatedreimbursed201 ded the Attorney General's averagereceived.In 201 3, the Attorney General settledwholesale pricing litigation. Since 2007, thewith the last two drug manufacturers named inAttorney General has recovered 28.3 millionhis lawsuits-Abbott Laboratories and Novartisfrom similar settlements with manufacturers.Pharmaceuticals Corp.-recovering more thanThe chart below summarizes the amount 1 .75 million collectively from these twoof money each settling defendant manufacturercompanies to reimburse the State and itshas paid the State ofldaho since 2005:DATECOMPANYSETTLEMENT 252,027.4407/1 2/05TAP Pharmaceutical Products, Inc. (Lupron drug only)*1 0/29/06Dey, Inc. and Dey, L.P. * 1 , 1 80,600.0006/25/08Bristol-Myers Squibb Company and Apothecon, Inc.* 1 ,738,71 9.0007/23/09Ben Venue Laboratories, Inc., Boehringer IngelheimPharmaceuticals, Inc., Roxane, Inc.06/ 1 0/ 1 0Alpharma USPD Inc. and Purepac Pharmaceutical Co. 1 ,274,623.0008/23/1 0Teva Pharmaceuticals USA, Inc., Ivax Corp., IvaxPharmaceuticals, Inc., and Barr Laboratories, Inc. 1 ,900,000.001 0/22/ 1 0Sandoz, Inc. 1 ,650,000.000 1 / 1 4/1 1Warrick Pharmaceuticals Corporation and Schering-PloughCorp.03/3 1 / 1 1Par Pharmaceuticals Cos., Inc. 1 ,700,000.0008/ 1 0/1 1AstraZeneca Pharmaceuticals LP and AstraZeneca LP 2,500,000.0009/28/1 1Merck Sharp & Dohme Corp. , f/k/a Merck & Co., Inc. 1 ,600,000.001 2/05/1 1Johnson & Johnson, Centocor, Inc., Janssen PharmaceuticalProducts, LP, McNeil-PPC, Inc., Ortho Biotech Products,LP, Ortho-McNeil Pharmaceutical, Inc. 2,000,000.000 1 /27/ 1 2Mylan Inc. and Mylan Pharmaceuticals Inc.04/ 1 3/ 1 2SmithKline Beecham Corp., d/b/a GlaxoSmithKline-6- 666,000.00 750,000.00 625,000.00 2,600,000.00

790,000.0006/0 1 / 1 2Forest Laboratories, Inc.07/ 1 2/ 1 2Watson Pharma, Inc. and Watson Pharmaceuticals, Inc.07/3 1 / 1 2Aventis Pharmaceuticals Inc.1 2/27/ 1 2Pfizer Inc. and Pharmacia Corp. 2,900,000.0002/05/1 3Abbott Laboratories 1 ,000,000.0007/ 1 0/ 1 3Novartis Pharmaceuticals Corp. 1 ,700,000.00 828,500.00 750,000.00TOTAL:* Pre-Litigation Settlement 28,399,469.44OTHER CONSUMER PROTECTION CASESI "American School Publishing" for coupon adsALLIED COMMERCIAL PARTNERS, LLCThe Attorneylthat were never published.General sued AlliedCommercial Partners, LLC, and its manager,The parties reached a settlement inDairld Wurtz, for violations of the IdahoJanuary 201 3 wherein the company paid 9,227Consumer Protection Act and Idaho's loanto 40 consumers who filed complaints with thebroker law.Attorney General. American School PublishingAllied Commercial agreed to settle thealso agreed to pay restitution to other consumersAttorney General's lawsuit by entering into awho subsequently contacted the AttorneyConsent Judgment. The settlement requires theGeneral. To offset the Attorney General'scompany to comply with Idaho law and to paylitigation costs, he received a payment of 1 ,500 1 9,000 in restitution to consumers. Thefrom the company.company also paid 1 ,500 to reimburse theAttorney General for his litigation expensesAUTOS4 LESSThe Attorney General settled a matterwith Autos 4 Less to resolve allegationsAMERICAN SCHOOL PUBLISHING, LLCIn 201 1 the Attorney General filed aconcerning the sale of a used motor vehicle thatconsumer protection lawsuit against Americanthe Attorney General alleged violated the IdahoSchool Publishing, LLC, alleging that hundredsRules of Consumer Protection.of small business owners in eight states paidIn this matter, a consumer traded-in avehicle and agreed to finance the remainder of-7-

the purchase in a subject-to-financing contract.201 4. The district court is expected to rule onAutos 4 Less sold the trade-in vehicle andthe motion in the coming weeks. A court trial isassigned the purchase contract to a third-partyscheduled to begin in April 201 4.financingcompany.Afterthefinancingcompany declined to finance the purchase,CORPORATE RECORDS SERVICEAutos 4 Less seized the delivered vehicle andCorporate Records Service paid therefused to refund the trade-in allowance to theAttorney General a 1 5,000 civil penalty toconsumer. Rule 237 of the Rules of Consumersettle allegations that its direct-mail ads toProtection prohibits this type of behavior.1 4,500 Idaho businesses violated the IdahoUnder terms of the settlement, Autos 4Consumer Protection Act. For 1 25, CorporateLess paid the consumer 2,500 plus interest inRecords Service promised to prepare therestitution and reimbursed the Attorney Generalbusinesses' corporate minutes. However, those 2,500 for the cost of his investigation.that paid the money received only a blanknotebook. Because the ad appeared to originateCoINUTS,MITCHELLINC. ,&KEVINEvARDfrom the government, a number of businessesbelieved they were required to respond.In April 201 3 the Attorney General suedTo prevent this confusion in the future,CoiNuts, Inc., and its owner, Kevin Evardthe parties' settlement prohibits CorporateMitchell, in Kootenai County District Court forRecords Service from using official words andmultiple violations of the Consumer Protectionsymbols inAct. Between 2008 and 201 2, consumers paidits ads.Thecompanyalsoreimbursed the Attorney General for the feesthe defendants hundreds of thousands of dollarsand costs incurred during his investigation.for gold and silver that the defendants promisedto deliver, but never did. Without returning theDECEPTIVE DISCOUNT CLUBSconsumers' money, Mitchell closed his store,The Attorney General joined a 32leaving behind dozens of damaged consumers.amillion multi-state settlement with Affinion andjudgment against CoiNuts, Inc., in Septemberits subsidiaries, Trilegiant and Webloyalty. The201 3 for 742,826, which includes consumersettlement resolves allegations that Affinionrestitution, civil penalties, and attorney's fees.used misleading business practices to trickThe Attorney General argued his Motion forconsumers into signing up and paying forSummary Judgment against Mitchell in Januarydiscount clubs and memberships.TheAttorneyGeneralobtained-8-

Thereapproximatelyareoperating in Idaho and paid the office 90,0007,600"members" of these programs in Idaho andin consumer restitution.Idahoans will receive approximately 500,000Consumers reported that eCommercein restitution under the settlement when it isSupport misrepresented the written materialsfinalized in 201 4. In addition, Affinion paidand coaching services it sold for thousands of 250,000 to reimburse the Attorney General fordollars. The company allegedly misrepresentedhis costs related to the investigation.the amount of time consumers would have toAffinion and its subsidiaries run multiplededicate to the program and how much moneyconsumers could earn from the program."discount clubs" and "membership programs."InThese clubs offer services such as creditadditiontopaymgrestitution,monitoring, roadside assistance, and discountedeCommerce Support paid the Attorney Generaltravel. Consumers complained that Affinion 1 0,000 to reimburse him for his investigativechargedandcosts. The settlement also holds a 50,000 civilmemberships without their authorization orpenalty in abeyance, pending eCommerceknowledge. Some also complained that onceSupport's compliance with the settlementthemfortheseservicesthey discovered the charges, they had troublecanceling or getting a refund.LENDER PROCESSING SERVICES, INC.The settlement requires Affinion toThe Attorney General settled with one ofprovide clear and conspicuous information tothe nation's largest providers of mortgage loanenrolled consumers regarding their membership,processing services and its subsidiaries inperiodic reminders of their enrollment, andFebruary 201 3. The settlement, which resolvedmake changes to its cancellation practices.allegations that Lender Processing Services, Inc.(LPS), acting on behalf of mortgage servicers,improperly signed and notarized loan defaultECOMMERCE SUPPORT, LLCpaperwork, required LPS to change its businessThe Attorney General closed down apractices and to pay the State 890,000.Boise company that sold ecommerce coachingservices to thousands of consumers throughoutthe United States and Canada. As part of aSTANDARD& POOR'SGeneral,The Attorney General sued Standard &eCommerce Support, LLC, agreed to stopPoor's Financial Services, LLC and its parentsettlementwiththeAttorneycompany, McGraw-Hill Companies, Inc., for-9-

violations of the Idaho Consumer ProtectionIdaho's lawsuit to state court 1s currentlyAct stemming from S&P's public statementspending.regarding its securities rating business.commenced.Intheinterim,discoveryhasThe Attorney General alleges that S&PmadefalseandmisleadingstatementsWHITE HAT GROUPandThe Attorney General settled a matterobjectivity in its role as a credit rating agencywith the White Hat Group and its owner, Markfor mortgage backed securities. The AttorneyWicklund,General alleges that S&P placed internalcompanygoals of market share and generating revenueunauthorized practice of law. In addition tofrom ratings fees ahead of S&P publicrequiring payment of restitution to formerstatements of independence and objectivity.customers, the settlement prohibits White HatConsequently, S&P's false and misleadingGroup and Wicklund from providing legalstatements violated the Idaho Consumeradvice and performing other acts that constituteProtection Act.the practice of law in tionsWicklundengagedthattheintheThe Attorney General seeks remediesThe Attorney General alleged thatin the form of injunctive relief to prevent thisWicklund falsely represented that he wastype of behavior in the future, and statutoryqualified to represent them in legal matterspenalties and disgorgement of fees charged bywhen he was not. It is a violation of theS&P for securities ratings during the relevantConsumer Protection Act to represent that youperiod. The Attorney General is not seekinghave qualifications you do not have. Consumersdamages on the behalf of private parties oralso complained that the White Hat Group didgovernment entities that may have relied onnot perform the services for which consumersS&P' s allegedly false statements in makinghad paid. The settlement also requires Whiteinvestment decisions.Hat Group and Wicklund to reimburse theThe Attorney General filed the lawsuitAttorneym state court in February 20 1 3. However,Generalinvestigation.S&P removed the case to federal court beforeanswering the complaint. A motion to remand- 10 -forthecostsof the

* COMPETITION ACT *The purposes of Idaho's Competition Act are to maintain and promote economic competition inIdaho commerce, provide the benefits of that competition to consumers and businesses in the State, andestablish efficient and economical procedures to accomplish these purposes and policies. A marketplacefree of unreasonable restraints of trade will yield the best allocation of Idaho's economic resources, thelowest prices, the highest quality, and the greatest material and innovative progress. In 201 3, theAttorney General exercised his enforcement responsibilities under the Competition Act (and relatedfederal antitrust laws) and continued litigation in several other matters brought under the CompetitionAct. He also announced a settlement of one such matter.AMERICAN EXPRESS COMPANY,MASTERCARD, & VISA LITIGATIONAlongwiththeUnitedconsumers any cost-saving options such asdiscounts or rewards for using less expensiveStatesforms of payment. Restrictive payment rulesDepartment of Justice and other state attorneysinhibit price competition among credit cardgeneral, the Attorney General filed a civilnetworks. When merchants face increasedantitrust lawsuit in the Eastern District of Newbusiness costs, consumers pay higher prices.York against Visa, MasterCard, and AmericanThe attorneys general and USDOJExpress. The lawsuit alleges that the companies,reached a settlement with Visa and MasterCardwhich operate the three largest credit cardin the fall of 201 0. The court approved thenetworks in the country, require merchants tosettlement in 201 1 . Because of the settlement,restrict the types of discounts provided to creditcompanies and retailers may provide theircard customers.customers with more options and cost savingEvery time a consumer uses a credit cardincentives. Merchants also may inform theirto buy something from a merchant, thatcustomers which cards will lower business costsmerchant pays a fee that is passed on tothe most, allowing merchants to pass theseconsumers through higher prices. In 2009 alone,savings on to consumers.the three credit card companies and theirLitigation against American Expressaffiliate banks collected more than 35 billion incontinues. The Attorney General asserts thatthese fees. Visa, MasterCard, and AmericanAmerican Express maintains the industry's mostExpress went beyond imposing fees andrestrictive merchant rules and has the highestallegedly prevented merchants from offeringfees of any credit card company. Presently,- 11 -

American Express's rules prohibit any of theTo recover restitution and damages formillions of merchants that accept AmericanIdaho, in 2006 the Attorney General joined aExpress from taking advantage of the discountsmultistateand rebates that the Visa and MasterCardmanufacturers and their subsidiaries, claimingsettlement would permit. While a precise date isviolations of the Competition Act and federalyet to be determined, a trial is expected to takeantitrust law. The lawsuit alleges that, as a resultplace in late spring or early summer of 201 4.of the manufacturers' price fixing, Idaholawsuitagainst13DRAMconsumers, businesses, and state and localDYNAMIC RANDOM ACCESS MEMORYMANUFACTURER LITIGATIONgovernmental agencies paid more for theirInvolving one of the largest price-fixingcomputers, servers, and other electronic devicescartels ever discovered, the dynamic randomthan they would have paid had there not beenaccess memory (DRAM) litigation involves 1 3any price fixing.Themanufacturers and represents millions of dollarsAttorneyGeneralandthein damages to purchasers and end userdefendants have now entered into settlementsconsumers, including businesses, state agencies,collectively totaling 3 1 0 million in theand political subdivisions.participating jurisdictions, including restitutionservers,for damaged consumers. The restitution is onhavebehalf of consumers, businesses, the State ofsemiconductors (i.e., memory chips) known asIdaho and certain local governmental agencies.dynamic random access memory (DRAM).A claims process, which is being implemented,DRAM holds temporary instructions and datawill determine the amounts to be distributed toavailable for quick access while the device is inthe various harmed ductsuse. Electronic products with DRAM areE-BOOKS PRICE FIXINGAND SETTLEMENTpurchased by consumers, businesses, schoolsand government bodies throughout the world.LITIGATIONThe Attorney General joined with theThe defendant DRAM manufacturersattorneys general of 49 states in an antitrustallegedly discussed and coordinated the priceslawsuit against Apple, Inc., and five of thethey charged to consumers and to the largelargest U. S. book publishers: Hachette Bookcomputer manufacturers. In June 2002, theGroup (USA), HarperCollins Publishers LLC.,United States Department of Justice launched aSimon & Schuster Inc., Holtzbrinck Publisherscriminal investigation into the manufacturers.- 12 -

LLC d/b/a Macmillan, and Penguin Groupviolated state and federal antitrust laws in(U. S.A.), Inc.Apple's role in the E-book price fixing scheme.The lawsuit alleges that the publishersThe final judgment imposed limitations onand Apple conspired to raise the retail price ofApple's ability to control its E-book pricing andE-books in two significant ways. First, in orderregulates how Apple can deal with individualto gain leverage in retail price negotiations withpublishers for a period of five years. The courtdistribution outlets such as Amazon, four of thealso appointed an external monitor to reviewpublishers agreed in late 2009 to delayApple's antitrust compliance for a period of twopublication of certain front-list E-books foryears. Apple and some of the settling publishersseveral months following each books printhave appealed the judgment.release. Second, around January of 201 0, AppleThe trial did not address the issues ofbegan to facilitate an agreement among thedamages or civil penalties. A second trial inpublishers to change the E-book distributionMay 201 4 is scheduled to resolve the issue ofsystem from a Wholesale-Retail Model to andamages.Agency Model. Under the Wholesale-RetailMEDICALREGIONALLUKE'SST.CENTER AND SALTZER MEDICAL GROUPModel, distributors such as Amazon or Barnes& Noble set prices and sold E-books toSt. Luke's Health System, Ltd. (St.consumers. The Agency Model allowed theLuke's) is a not-for-profit health system thatpublishers to set E-book prices and sell E-booksoperates six hospitals in Idaho and employsdirectly to consumers.several hundred physicians, including 450 in theBy May 21 03, settlements had beenTreasurereached with all the publishers, leaving Apple asValley.SaltzerMedicalGroup(Saltzer) is a for-profit, multispecialty physicianthe sole litigating defendant. Together, thegroup based in Nampa, Idaho, with additionalpublishers agreed to pay more than 1 64 millionclinics in Boise, Meridian and Caldwell. Saltzerto consumers nationwide. Collectively, Idahoincludes 44 physicians, including a largeconsumers were entitled to receive up tonumber of primary care physicians (PCPs). In 832,000 for E-books purchased by Idahotheir own words, St. Luke's is the "dominant"consumers between April 1 , 201 0 and May 2 1 ,health system in the Treasure Valley, and201 2 as a result of the publisher settlements.Saltzer is the "dominant" medical group inIn July of 201 3, following a three weekNampa.bench trial, a federal court ruled that Apple- 13 -

On December 3 1 , 201 2, St. Luke'sacquiredSaltzer'sassets,andconcentration 1s more than double the levelneeded to create a presumption of competitiveSaltzer'sphysicians entered into a five-year professionalharm under established antitrust law.A one month trial was held in federalservices agreement with St. Luke's.After a rigorous investigation conducteddistrict court and closing arguments werejointly with the Federal Trade Commissionpresented to the Court November 7, 201 3. A(FTC), the Attorney General and the FTCdecision of the Court is pending.The Attorney General's concerns withconcluded that the acquisition violated federaland state competition lawsacquisitions that maythat prohibitthe acquisition are that it will enhance St.substantially lessenLuke's market power, allowing it to extractcompetition.higher reimbursements from health plans at theAfter St Luke's and Saltzer declined theexpense of local employers and healthcareAttorney General's request to postpone closingconsumers. Indeed evidence was presented aton the acquisition, he and the FTC filed suit intrial showing that the Defendants expect thefederal court to unwind the deal.acquisition to increase their bargaining leverageAttorneywith health plans

Products, LP, McNeil-PPC, Inc., Ortho Biotech Products, LP, Ortho-McNeil Pharmaceutical, Inc. 01/27/12 Mylan Inc. and Mylan Pharmaceuticals Inc. 625,000.00 04/13/12 SmithKline Beecham Corp., d/b/a GlaxoSmithKline 2,600,000.00 -6 - 06/01/12 Forest Laboratories, Inc. 07/12/12 07/31/12