AG wins price gouging lawsuit against Pharmacia Corp.

Chris Rizo Feb. 17, 2009, 2:19pm

J.B. Van Hollen (R)

MADISON, Wis. (Legal Newsline)-Drug maker Pharmacia Corp. has been found to have defrauded Wisconsin's Medicaid program by reporting inflated drug prices, state Attorney General J.B. Van Hollen said Tuesday.

The Republican attorney general said the Peapack, N.J.-based pharmaceutical company was convicted by a Dane County jury of reporting fraudulent drug prices for reimbursement.

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.

The case against Pharmacia was brought by the Wisconsin Department of Justice. The AG''s office said the jury determined that the company should pay $9 million to compensate the state for its losses.

The jury found that Pharmacia violated the Medicaid Fraud law more than 1.4 million times. Under Wisconsin's Medicaid fraud forfeiture statute, the court may award a minimum of $100 per violation up to a maximum of $15,000 per violation.

"This verdict confirms that Pharmacia knew when it published false average wholesale prices for its drugs it would cause the state to grossly overpay for prescription drugs," Van Hollen said in a statement. "Those fraudulent price reports cheated the taxpayers of Wisconsin. I won't tolerate fraud."

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