BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced a $1.7 million settlement on Monday with a prescription drug manufacturer resulting from its average wholesale price reporting.

Wasden filed a lawsuit agains Watson Pharmaceuticals Inc. in 2007. The lawsuit also named several other prescription drug manufacturers.

The 2007 suit sought to recover taxpayer money for allegedly excessive prices paid by Idaho Medicaid for prescription drugs.

Low-income Idahoans are provided health care services by Idaho Medicaid, including prescription drugs. Under state law, pharmacies must be reimbursed by Idaho Medicaid for the estimated acquisition cost of a drug. The average wholesale price, as reported by drug manufactures, is used to determine that amount.

Watson published an average wholesale price of $0.662 for its pharmaceutical Lorazepam in 2003, but Wasden alleges that the actual average wholesale price was $0.049, resulting in a 1,239 percent difference between the actual and published price.

"The publishing of false drug prices harms taxpayers and the state," Wasden said. "My office has investigated and litigated this matter and what we uncovered is that in a very large number of instances, drug manufacturers reported false and inflated prices for their drugs."

Under terms of the settlement, Watson will pay $423,724.61 to the state's General Fund and $1,055,459.48 to the Cooperative Welfare Fund to reimburse the federal share of Medicaid overpayments.

An additional $50,000 will be paid to the Consumer Protection Account to reimburse the attorney general's office for costs.

Watson admitted no liability or wrongdoing in agreeing to the settlement.

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