DES MOINES, Iowa (Legal Newsline) - Iowa will receive more than $4.3 million from eight prescription drug-making companies to settle allegations that they purposefully reported false and inflated drug prices that served as the basis for Medicaid reimbursements paid by taxpayers.
"We alleged these companies - and 70 others - deliberately and unlawfully reported false drug price information in order to increase reimbursements paid by the Iowa Medicaid program and to increase the market share for their own drugs," state Attorney General Tom Miller said.
In Oct. 2007, Miller filed a lawsuit alleging that 78 pharmaceutical companies had unlawfully used pricing schemes resulting in overcharges of millions of dollars to the Iowa Medicaid Program, which had spent more than $1.6 billion for the 78 companies' drugs between 1992-2005.
"I think some drug makers' practices amounted to abuse of the Medicaid reimbursement system," Miller said. "The practices have harmed taxpayers, undercut the Medicaid program designed to help the poor, and driven up health costs for everyone else, too."
The eight drug makers - Dey, Inc., Abbott Laboratories, Inc., Amgen, Inc., Baxter International, Inc., and its associated companies, Ben Venue Laboratories, Inc., Boehringer Ingelheim Roxane, Inc., and its associated companies, Immunex Corp., and Roxane Laboratories, Inc. - are companies with relatively low drug utilization in Iowa's Medicaid program.
Dey, Inc., has agreed to pay $1.8 million as part of the settlement. The remaining seven will pay a total of $2.5 million. About 60 percent of the settlement funds will go to the federal government as Iowa's Medicaid program is funded significantly with federal money.
As part of the settlement, the companies denied any wrongdoing.
"We are announcing settlement with the first eight companies today," Miller said. "The suit continues with respect to all the others."