AWP settlement worth $2.5M

Bryan Cohen Aug. 12, 2011, 2:00am


BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced a $2.5 million settlement on Thursday with two prescription drug manufacturers resolving alleged drug pricing violations.

AstraZeneca Pharmaceuticals LP and AstraZeneca LP allegedly reported false or misleading average wholesale prices. If the manufacturer of a drug reports an inflated or false average wholesale price for a drug, taxpayers can pay too much for the drug through Medicaid reimbursements.

Idaho Medicaid provides health care services, including prescription drugs, to low income Idahoans. By law, Idaho Medicaid must reimburse pharmacies at the estimated acquisition cost of the drug. Idaho Medicaid uses average wholesale price as reported by drug manufacturers as the basis for determining this amount.

AstraZeneca's pharmaceutical product Prilosec had a published average wholesale price of $4.134 in 2003. Wasden alleged that the actual average wholesale price was $3.290 in 2003, which results in a 26 percent difference between the published price and the actual price.

"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."

The $2.5 million payment will be used to reimburse taxpayers for the alleged excessive prices Idaho Medicaid paid for prescription drugs as a result of the average wholesale price reporting. Over $620,000 will be deposited in the state's general fund to be appropriated by the legislature and $50,000 will go to the consumer protection account to reimburse Wasden for legal costs.

More than $1.5 million will go to the state's cooperative welfare fund and will be applied as a credit against the federal government's next payment to Idaho Medicaid. The federal government pays for approximately 70 percent of the cost of the Idaho Medicaid program.

The companies admitted no liability or wrongdoing as part of the settlement.

"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 companies were willing to work with my office to reach an appropriate resolution."

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