Utah settles first of many pending Medicaid fraud suits‏

Nick Rees Sep. 18, 2009, 2:35am

Mark Shurtleff (R)

SALT LAKE CITY (Legal Newsline) - A drug manufacturer that allegedly overcharged Utah's Medicaid program has agreed to pay a $1 million settlement, the state's attorney general has announced.

"Utah will continue to aggressively pursue those who cheat or game the system to increase their company profits and market share at the expense of taxpayer-funded health care programs," Attorney General Mark Shurtleff said.

Drug manufacturer Dey, L.P., is alleged to have falsely inflated the drug prices that are used by Medicaid in determining reimbursement amounts to pharmacies and to have marketed the difference in price between what was reported and actual prices as a means of convincing pharmacies that its products were more profitable than competing products.

The resulting difference between the inflated price and the actual price ended up costing Medicaid from as little as 6 percent to 100 percent more than the actual cost of the drug.

As part of the settlement, Dey denied any wrongdoing.

"We hope the pharmaceutical industry will take notice and stop any practice that unfairly drives up health care costs," Robert Steed, assistant attorney general and director of the Utah Medicaid Fraud Control Unit, said. "Dey was one of the smaller drug companies facing a Medicaid lawsuit from the Utah Attorney General's Office. We fully expect to bring a great deal more money back to Utah's Medicaid program."

Approximately 26 states, including Utah, are pursuing Average Wholesale Price civil litigation against falsely reported drug prices by pharmaceutical manufacturers.

Of almost 36 drug manufacturers sued by Utah's office of the attorney general, Dey is the first company to finalize a settlement with the state. Other manufacturers are currently in negotiations.

More News