Two pharma companies settle with Idaho AG

Keith Loria Jan. 13, 2011, 11:56am


BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced on Thursday that he has reached a $750,000 settlement with two pharmaceutical companies that allegedly reported incorrect average wholesale prices to the state's Medicaid program.

Prescription drug manufacturers Warrick Pharmaceuticals Corporation and Schering-Plough Corp., now doing business as Merck & Co., allegedly violated the state's Consumer Protection Act by not reporting accurate figures.

"Where published prices are false or misleading, the taxpayers are significantly harmed by excessive Medicaid reimbursements," Wasden said.

"Investigation by my office has revealed that the reported average wholesale price often is not related to the actual wholesale price paid for the drug. Misrepresenting the wholesale price is a violation of the Idaho Consumer Protection Act."

According to state law, Idaho Medicaid must reimburse pharmacies at the "estimated acquisition cost" of a drug, so inflated or false averages can cause taxpayers to pay too much for the drug through Medicaid reimbursements.

Warrick had published an average wholesale price for Albuterol at $1.259 in 2003, yet the actual average wholesale price allegedly should have been 25 cents, Wasden said.

Although both companies admitted to doing nothing wrong, under the terms of the agreement, the two companies will pay resitution to the state's general fund and cover costs of the litigation.

"This settlement provides relief to Idaho taxpayers and brings the matter to a conclusion without the need for continued litigation," Wasden said. "I appreciate that the company was willing to work with my office to reach an appropriate resolution."

In the past five years, Wasden has resolved eight average wholesale price cases with drug manufacturers, resulting in approximately $9.4 million recovered for Idaho taxpayers. Three similar average wholesale price cases, naming approximately 21 other drug manufacturers, are still pending.

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