Kansas Sues 13 Drugmakers Over Medicaid Fraud
8 CommentsBy Ed Silverman // October 24th, 2008 // 4:20 pm
Kansas Attorney General Steve Six sued 13 drugmakers today, alleging they unlawfully inflated drug costs paid by taxpayers through the state’s Medicaid program. The suit claims the drugmakers deliberately misreported pricing info in order to hike reimbursement.
“We believe Kansas has lost millions of dollars as a result of these drug companies’ fraudulent pricing schemes,” Six says in a statement. “We allege that the drug manufacturers deliberately inflated the reported average wholesale prices and other wholesale prices for their drugs in order to increase market share for their products. This is a disturbing abuse of the Medicaid reimbursement system.”
“Because of the drug companies’ inaccurate pricing, the Kansas’s Medicaid program has spent millions of dollars more for prescription drugs than it should have,” Six says. “The companies’ false price reporting is all the more offensive because it undercuts Medicaid, the publicly-funded health program created to assist our state’s most vulnerable citizens.”
The drugmakers (click on a name to see a lawsuit): Abbott Labs; Boehringer-Ingelheim; Dey; Eisai; Forest Labs; Glaxo; Johnson & Johnson; Mylan Labs; Purdue Pharma; Schering-Plough; Takeda Pharmaceutical; TAP Pharmaceutical; Wyeth.
According to the lawsuit, the Medicaid program spent more $160 million on meds last year. And the suit alleges the price for a drug paid by the state, based on a fraudulently-reported Average Wholesale Price and other price indicators, often bears no relationship to the true price and can exceed 100 percent to 200 percent above the actual price.
One example cited - Dey reported an AWP of $44.10 for Ipratropium Bromide, yet the AG claims the drugmaker sold the same drug to retail pharmacists for $8.35 - a 355 percent difference. And Glaxo reported an AWP of $128.24 for Zofran, but charged $22.61- a 450 difference.
Among the law firms representing the state is Beasley Allen, which is also representing Alabama in similar lawsuits against various drugmakers, including AstraZeneca, Bristol-Myers Squibb, Glaxo and Novartis. Several states have filed similar suits.
Former pharma Marketing Exec
This is a very disturbing trend and hopefully tighter controls can be designed and put in place that will prevent things like this in the future.
However, it is a bit surprising that Purdue Pharmaceutical has been caught in this web as they are a not for profit (the only one) Pharmaceutical company. So, there “motivation” i.e. profit isn’t the same as the others. I wonder why they would be involved in this sort of scheme?
Hope we learn more.
atlex
I’m pretty sure that Purdue is a privately-held, for-profit company.
Tonio
Purdue Pharma L.P. is definitely a profit-making, in the opinion of some, profit-raking company.
Reb
Not for Profit? Are you kidding me? You think they are a “non-Profit” Pharma Company? I now have serious doubts in the use of “exec” in your title.
Former pharma Marketing Exec
My Apologies, for some reason I was reading “Purdue” but thinking One World Health - which is a not for for profit Pharmaceutical company. Problems when we multitask….
Correct, Purdue is privately held, founded by Physicians, main focus is pain medications (hmm, I wonder if pain can be caused by charging too much for drugs…)
The Caped Crusader
Geez. What took so long for Kansas? Other states came in on this fraud stopping party over 6 years ago. Nothing like showing up late.
Condor
Speaking of late to the party — I didn’t see Ed’s until after I posted mine on the topic — on Saturday morning: a full day late. . . .
At the risk of being accused — as a “thread diverter” — I’ll mention that it appears one of the plaintiffs has dropped out of the ENHANCE ERISA would-be class action suit against Schering (also one of the defendants in the above actions), under the impression that his severance payments might be in danger, if he continued.
Plainly, such a result (depending on the timing of the suit — and the timing of the severance) would be void, as violative of public policy, in the United States. Assuming he was let go in the latest round of layoffs, and assuming he was offered, and accepted, severance — he cannot now be denied it, simply because he is ALREADY a party to the ERISA action. Once a suit is filed, Schering cannot “purchase his unvailability” as a witness — via severance.
He apparently had a rather substantial role in the Vytorin/Zetia study, for Schering. Much more on this, here:
http://shearlingsplowed.blogspot.com/2008/10/odd-development-in-schering-class.html
Great stuff above, Ed, as ever!
Namaste
Marianne Skolek
I have been actively exposing Purdue Pharma (a $10 billion criminally convicted pharmaceutical company) and its 3 CEO’s Michael Friedman, Howard Udell and Paul Goldenheim for criminally marketing OxyContin. I have worked on this for over 6 years. In July 2007, they were charged in Federal Court with marketing OxyContin to patients and physicians as less likely to be addictive or abused. They pled guilty and were sentenced. I testified against them in Federal Court and in front of the US Senate. Their actions have resulted in an epidemic of OxyContin addiction and death in every state in the country. My work now focuses on further action being taken against them and J. David Haddox, the gatekeeper of Purdue Pharma’s involvement in the criminal marketing of OxyContin. I am working with government agencies and the FDA to accomplish this next goal. Purdue Pharma has recently begun marketing OxyContin to pregnant women for pain. I have notified all Attorney Generals of this latest marketing ploy which will cause an epidemic of addiction and death to pregnant women and unborn babies. Purdue Pharma is also marketing for the undertreatment of pain in infants and pediatric patients which I believe is criminal. I have filed a charge against Purdue Pharma with the FDA and FTC which they have advised me they are taking “very seriously”.
Marianne Skolek
Activist for Victims of OxyContin and
Purdue Pharma - a criminally convicted pharmaceutical company
http://www.nytimes.com/2007/05/10/business/11drug-web.html?ex=1336536000&en=9cc24d9d766e92a6&ei=5124&partner=permalink&exprod=permalink
I testified against Purdue Pharma before the U.S. Senate
http://judiciary.senate.gov/testimony.cfm?id=2905&wit_id=6612
908-285-1232
mskolek@aol.com
http://www.oxydeaths.com