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Conway reaches $2M settlement with drug company

By Keith Loria | Jul 6, 2009

Jack Conway (D)

FRANKFORT, Ky. (Legal Newsline) - Kentucky Attorney General Jack Conway has announced a $2 million settlement with a pharmaceutical manufacturer accused of inflating prices.

The settlement was reached with Deerfield, Ill., pharmaceutical manufacturer Baxter Healthcare Corporation, a subsidiary of global healthcare company Baxter International, Inc., which allegedly published inflated prices which caused the Kentucky Medicaid program to pay substantially more for Baxter's drugs than the actual cost of the drugs.

The Kentucky Medicaid program relies on published average wholesale prices to calculate Medicaid drug-reimbursement rates and the figures Baxter published significantly inflated AWPs for its intravenous solutions that bore no relationship to any prices that Baxter actually charged its customers.

"Taxpayers are footing the bill for these inflated drug prices, and my office is seeking to recover the money the Medicaid program lost as a result of this deception and overpayment," the Democratic AG said. "All of this could have been easily avoided if Baxter and the other defendants would have done what the law requires-report truthful prices."

It was unclear if Baxter admitted to any wrongdoing in accepting the settlement.

Also last week, Conway announced a $16 million verdict in Franklin Circuit Court against generic-drug giant Sandoz for defrauding the Medicaid program and Kentucky consumers by inflating the prices of their prescription drugs.

Since January 2008, when Conway took office, the office of the attorney general has collected $59 million for the Medicaid program and for Kentucky taxpayers.

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