Merck Found Liable For Overcharging Massachusetts

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pills-and-money1After a three-week trial, a federal jury decided former Schering-Plough subsidiary Warwick Pharmaceuticals caused the Massachusetts Medicaid program to overpay pharmacists for prescriptions of the albuterol asthma med, and Merck - which now owns Schering-Plough - must pay $4.6 million in compensatory damages. Punitive damages have yet to be determined.

The trial was part of ongoing and sprawling litigation centered in federal court in Boston in which numerous drugmakers have been sued for allegedly overcharging states for their medicines (here is the original lawsuit and you can see related coverage here). AstraZeneca, for instance, recently agreed to settle a lawsuit over average wholesale pricing by paying $103 million (back story).

For its part, Merck plans to appeal, but had argued Warrick was never required or asked to provide info about pricing info, and that prices reported to other parties were accurate. The drugmaker also contended the state had accurate info about those prices from other sources. Bruce “We strongly believe the evidence showed that the Commonwealth made informed choices about amounts it paid to Massachusetts pharmacists, and that Warrick was in no way responsible for those choices,” says Merck exec vp and general counsel Bruce Kuhlik, in a statement. Warwick, by the way, ceased to exist two years ago.

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  1. For what it’s worth — here’s my “Hassan Hangover” riff (including a YouTube video trailer!) on it all.

    Good stuff, Ed!

    Namaste

  2. Does anyone know what percentage of Schering-Plough’s legal budget goes to legal defense as opposed to filing new patents?

    Also, I want to make sure that I understand the case correctly…was there a contract between the two parties that specified prices? Were the prices paid based on a formula and was the pricing process a valid pricing process?

  3. That is a lot of money. I’m kind of glad that a greedy company like this is being held accountable for.

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