Schneiderman settles seven-year-old lawsuit

Keith Loria Feb. 18, 2011, 3:58pm


NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced on Friday that he has reached a $2.5 million settlement with a pharmaceutical company that allegedly inflated the price of drugs sold to state health programs, including Medicaid.

Pharmacia Corporation allegedly inflated the average wholesale price of the medications it produced, causing the base reimbursement rates on the wholesale prices calculated to be larger than they should have been.

The company's alleged false numbers caused government health plans, like Medicare, Medicaid and EPIC, to pay more for certain drugs that the pharmaceutical company manufactured.

The suit, filed in 2003, alleged that the company didn't take into account discounts, rebates, chargebacks and other price concessions to their wholesalers.

"New York's taxpayers will no longer foot the bill when contractors inflate their prices to make an extra buck," Schneiderman said. "These are hard financial times for our state, and my office will do its part by uncovering every dishonestly claimed dollar, and holding those who take advantage of New York accountable."

The company has already lived up to part of the settlement agreement by paying $2.5 million to the New York Medicaid program and to the Elderly Pharmaceutical Insurance Coverage Program. It also paid costs associated with the litigation.

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