Wis. AG settles with pharma company

Keith Loria Sep. 20, 2010, 11:29am

Van Hollen

MADISON, Wis. (Legal Newsline) - Wisconsin Attorney General J.B. Van Hollen announced on Friday that he has reached a $2 million settlement with a defendant in the litigation against 36 pharmaceutical manufacturers that allegedly defrauded the state's Medicaid program.

As a result of the settlement, Dey Inc. will pay a total of $2 million to settle the state's claims, with $1.7 million being returned to Medicaid and $300,000 to pay for litigation costs.

"This most recent settlement again confirms our commitment to bring this law enforcement action to a successful and effective conclusion," Van Hollen said.

"What we are after is to protect the program integrity of Wisconsin Medicaid. Our taxpayers are genuinely concerned and more than willing to provide for our neediest citizens. What we refuse to do is to line the pockets of those who engage in deceptive and fraudulent pricing activities."

The 36 companies allegedly reported fictitious prices to deceive the Medicaid pharmaceutical reimbursement system in order to increase sales and market share.

The lawsuit alleges that the pharmaceutical manufacturers caused false average wholesale prices to be published by First DataBank, with the understanding that Wisconsin would rely on that information to set its reimbursement formulas, resulting in higher payouts for drugs than they should have been.

The original complaint was filed in Dane County Circuit Court in 2004.

In April, Boehringer Ingelheim Pharmaceuticals Inc., Boehringer Ingelheim Roxane Inc., Ben Venue Laboratories Inc., and Roxane Laboratories Inc., paid a total of $7.75 million to settle the state's claims.

In February of 2009, a jury awarded $9 million in damages against manufacturer Phamacia. The court also assessed forfeitures, costs and fees and ordered the company to pay a total of over $22 million. That ruling is currently being appealed and litigation against other manufacturers in Dane County has been stayed pending the results.

Defendant Baxter Healthcare Corporation settled its claims by agreeing to pay $1.05 million to Wisconsin Medicaid. Amgen Inc., and Immunex both settled with the state in December 2008, agreeing to pay a total of $2 million to Wisconsin Medicaid.

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