Idaho AG announces recovery of $28 million in Medicaid cases

BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced Tuesday his office completed six years of litigation involving false price reporting by major pharmaceutical companies, recovering more than $28 million in total.

Wasden's claims against 33 prescription drug manufacturers resulted from the manufacturers' allegedly false reporting of average wholesale prices of certain prescription drugs. As a result of the allegedly false reporting, Idaho Medicaid overpaid millions of dollars for prescriptions over a period of many years.

"In negotiating these settlements, we tried to look forward as well as backward," Wasden said. "We recovered a significant amount of money to compensate the state for past practices. But equally as important, the state will receive pricing data from these companies going forward. That element of the settlements will help protect the taxpayers from future pricing abuses."

In total, Wasden's office recovered $28,399,469.44 and won price disclosure concessions that will protect Idaho taxpayers going forward.

Idaho Medicaid provides healthcare services, such as prescription drugs, to low-income Idahoans. The program reimburses pharmacies at the estimated acquisition cost of the drug plus a dispensing fee. Until July 1, 2011, Idaho Medicaid primarily used average wholesale price as reported by drug manufacturers to determine the estimated acquisition cost. If an average wholesale price was inflated, the state could pay much more than the price actually due to the pharmacies.

Because Idaho Medicaid receives about 70 percent of its funding from the federal government, $13,557,797.54 was returned to the federal government in the form of credits against future payments to Idaho Medicaid. The state of Idaho placed $7,161,357.03 into its General Fund while the rest was used to cover court and attorney costs.