Kansas AG sues 17 more drug companies over pricing

Chris Rizo Nov. 17, 2008, 3:51pm

Steve Six (D)

TOPEKA, Kansas (Legal Newsline)-Seventeen pharmaceutical companies are being sued by Kansas Attorney General Steve Six on top of the 13 drug companies for allegedly price gouging the state's Medicaid program.

Six, a Democrat, claims the companies deliberately misreported drug price information to the state in an effort to increase the Kansas Medicaid program's reimbursement rates.

Drug companies are required to disclose their pricing schemes to a variety of customers, including pharmacies, wholesalers and distributors. The information is used by the state to determine what Medicaid pharmacies pay for the medications.

Those costs, plus prescription dispensing fees, are then paid to Medicaid pharmacies.

"We believe Kansas has lost millions of dollars as a result of these drug companies' fraudulent pricing schemes," Six said. "We allege that the drug manufacturers deliberately inflated the reported Average Wholesale Price-or AWP-and other wholesale prices for their drugs in order to increase market share for their products."

For example, Amgen/Immunex reported an AWP of $137.94 for their drug Leucovorin Calcium, yet they sold the same drug to retail pharmacists for $14.58-a "spread" of 846 percent. In the case of Siscor, made by Ivax Corp. reported an AWP of $342.19 for Tobramycin Sulfate, yet it was determined that the actual price was $6.98-a "spread" of 4,802 percent.

The Defendants in the newest cases are: Ivax Pharmaceuticals, Bayer Pharmaceutical Corporation, Eli Lilly, AMGEN/IMMUNEX Corporation, Fujisawa Healthcare, Inc., Sanofi-Aventis, Inc., Shire Pharmaceutical, Genzyme, Otsuka America, Sepracor, HLR, B. Braun, Watson, MedImmune, Novartis, Genetech, and Organon.

Previously, the attorney general's office filed suit against: Takeda Pharmaceutical Company Limited, Abbott Labs, Wyeth, TAP Pharmaceutical Products, Inc., Schering Plough, Purdue Pharma LLP, Mylan Labs, Forest Labs, Boehringer, GlaxoSmithKline, Johnson & Johnson, Alza Corporation, Janssen Pharmaceutica Products, LP, McNeil-PPC, Inc., Ortho Biotech Products, LP, Ortho-McNeil Pharmaceutical, Inc., DEY, Inc., and Eisai.

The state is being represented by outside counsel. Handling the case is the Kansas law firm of Bartimus, Frickleton, Robertson & Gorny, P.C. and the Alabama firm of Beasley Allen. Six noted the firm was selected in consultation with the state Legislature after a competitive bidding process.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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