Indiana joins whistleblower suit

Bryan Cohen Sep. 9, 2011, 1:16pm


INDIANAPOLIS (Legal Newsline) - Indiana Attorney General Greg Zoeller announced on Friday that the state of Indiana has intervened in a whistleblower lawsuit against a drug manufacturer.

Par Pharmaceutical Companies Inc. allegedly engaged in a scheme to switch its generic drugs for those prescribed so it could collect greater Medicaid reimbursements than it was due. The state alleges Par Pharmaceutical was overpaid more than $2 million in reimbursements for its generics through the scheme with certain pharmacies.

Par Pharmaceutical markets generic versions of multiple widely prescribed drugs in the United States, including the antidepressant Prozac's generic fluoxetine, the antacid Zantac's generic ranitidine and the anti-anxiety medication BuSpar's generic buspirone.

Zoeller, joining the federal government and Michigan, intervened in the lawsuit on behalf of the state. The suit was originally filed five years ago by a private plaintiff - an Illinois pharmacist who became a whistleblower and exposed the allegedly illegal conduct. The suit was originally filed under seal and was unsealed after the federal government, Michigan and Indiana joined the case.

"It took a whistleblower's courage to expose this fraud against the Medicaid program," Zoeller said. "When a pharmaceutical company engages in an overbilling scheme in violation of rules against substituting generic drugs - which exist to protect consumers' health and protect Medicaid from fraud - we will aggressively seek to penalize it."

The complaint alleges that the New Jersey-based Par Pharmaceutical increased its sales though an illegal switching scheme to fill prescriptions with Par's higher-priced products rather than the specific drugs that doctors prescribed. The lawsuit alleges Par's scheme was designed to evade government price limits on generic drugs so the company could achieve greater profit at taxpayer expense than it would have otherwise.

Pharmacists are allowed to substitute a generic drug for a therapeutically equivalent brand-name drug if the generic is less expensive and has the same dosage strength and form. State and federal governments set maximum prices for popular generic drugs that vary depending on different dosage strengths and forms. Higher reimbursements mean that Medicaid had to pay more than necessary for Par's generic drugs, thus evading price limits and violating laws that require pharmacies participating in Medicaid to provide drugs economically. The difference between what Par allegedly should have received and what it did receive was an alleged overpayment of $2,010,157.49.

Indiana's portion of the lawsuit seeks civil penalties of at least $5,000 for each allegedly false claim submitted, litigation costs, treble damages, attorneys' fees and interest.

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