AWP suit settled in Idaho

By Ashton Daigle | May 27, 2010


BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced this week that two prescription drug companies have agreed to a settlement to pay the state more than $1.2 million.

The settlement with Alpharma USPD, Inc., and Purepac Pharmaceutical Co., now known as Actavis MidAtlantic LLC and Actavis Elizabeth, LLC, has been submitted for approval to the Fourth District Court in Ada County. The companies admit to no liability or wrongdoing.

"Where published prices are false or misleading, the taxpayers are significantly harmed by excessive Medicaid reimbursements," Wasden said. "This settlement reimburses unfair costs to Idaho taxpayers."

Idaho Medicaid provides health care services to low-income residents. Under state law, Medicaid must reimburse pharmacies and hospitals at the "estimated acquisition cost" of the drug. Idaho Medicaid typically uses "average wholesale prices," as reported by drug manufacturers as a basis for determining this amount.

Wasden said that if a manufacturer reports an inflated or false average wholesale price for a drug, taxpayers can pay too much for that drug through Medicaid reimbursements.

"Investigation by my office has revealed that the reported average wholesale price often is not related to the actual wholesale price paid for the drug and that reporting of inflated wholesale prices by drug manufacturers is prevalent in the industry," Wasden said.

Since 2005, Wasden has resolved five "average wholesale price" cases, recovering a total of $5.1 million for state taxpayers.

Wasden said there are three "average wholesale price" cases still pending with 29 drug manufacturers named.

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