The biotech reached a settlement with the state’s Justice Department, which charged Amgen and Immunex with submitting false wholesale prices to Medicaid. Amgen has also agreed to pay $300,000 in legal costs and fees.

Amgen and Immunex, which the biotech purchased six years ago, were among 36 drugmakers the state Justice Department has sued, alleging that each company reported “grossly inflated” average wholesale prices to Medicaid programs, resulting in reimbursements that were substantially higher than the actual cost of the drugs.

Both Amgen and Immunex allegedly reported average wholesale prices to pricing compendia for identified drugs that were inflated and did not reflect the actual average wholesale prices. The Medicaid program used the compendia for the payment or reimbursement of pharmacists for Medicaid recipients and consequently paid substantially more than actual costs, according to the state.

“Taxpayers are footing a bill based on the inflated published price, and this lawsuit is seeking to recover the money the Medicaid program lost as a result of this deception,” Wisconsin Attorney General JB Van Hollen says in a statement. “This all could have been easily avoided if the defendants just would have done what the law obligates them to do - report truthful prices. This settlement brings us a step closer to making taxpayers whole.” (here is the settlement).

Many of the three dozen drugmakers have been sued in other states for similar activities and Wisconsin has been coordinating its litigation with other Attorneys General and the federal government. A trial is scheduled against another drugmaker, Pfizer’s Pharmacia unit, on February 2, 2009 before Judge Richard Neiss.