Idaho AG settles with drug maker

Bryan Cohen Jun. 12, 2012, 6:51am


BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced a $790,000 settlement on Friday with a prescription drug manufacturer related to allegedly excessive prices Idaho Medicaid paid for the company's drugs.

Forest Laboratories Inc. allegedly reported an inflated or false average wholesale price for its pharmaceutical product Celexa in 2003. The company published an average wholesale price of $0.480. Wasden alleged that the actual average wholesale price was 28 percent lower than the actual price at $0.376 in 2003.

"The publishing of false drug prices harms taxpayers and the state," Wasden said. "My office has investigated and litigated this matter and what we uncovered is that in a very large number of instances, drug manufacturers reported false and inflated prices for their drugs."

Idaho Medicaid provides health care services, such as prescription drugs, to low-income residents of Idaho. Idaho Medicaid must reimburse pharmacies at the estimated acquisition cost of a drug. Idaho Medicaid mainly uses average wholesale prices as reported by drug manufacturers to determine the estimated acquisition cost. Taxpayers can pay too much for a drug through Medicaid reimbursements if a false or inflated average wholesale price is reported.

Lawsuits against drug manufacturers in this matter attempt to recover taxpayer money for excessive prices Idaho Medicaid paid to acquire prescription drugs. Wasden's office has made average wholesale price settlements with 29 drug manufacturers to recover more than $21 million. Three lawsuits Wasden filed against seven other drug manufacturers in 2007 are still pending.

The $790,000 settlement with Forest Laboratories will allow for the deposit of $185,228.21 into the state's General Fund, $461,030.94 to the Cooperative Welfare Fund and $50,000 to the consumer protection account to reimburse Wasden's office for costs.

Forest Laboratories admitted no wrongdoing or liability as part of the settlement.

"This settlement addresses the harm incurred by Idaho's taxpayers and the state," Wasden said. "It should stop the reporting of false and misleading drug prices and provide the state significant financial relief. This settlement is good for Idaho because it successfully resolves this dispute without the need for further, costly litigation."

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