Missouri Attorney General Sues Drug Makers Over Alleged Inflation of Medication Prices

Main Category: Pharma Industry / Biotech Industry
Article Date: 15 May 2005 - 15:00 PST

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Missouri Attorney General Jay Nixon (D) on Wednesday sued two drug makers and their parent companies over allegations that they inflated their Medicaid reimbursements by artificially increasing the average wholesale prices of three respiratory drugs, the... St. Louis Post-Dispatch reports. AWPs, which are set by pharmaceutical companies, are a factor in how much Medicaid reimburses for drugs. Nixon estimated that California-based Dey and New Jersey-based Warrick Pharmaceuticals overcharged the state Medicaid program by at least $15 million over 11 years. He said the companies created large discrepancies between AWPs and actual costs. The lawsuit also states that the companies "knowingly and intentionally" misled an independent company that compiles drug-pricing data. Nixon is seeking triple damages, which total at least $45 million before fines and costs are factored in. Dey is owned by Germany-based Merck KGaA, and Warrick is a subsidiary of Schering-Plough. In a prepared statement, Dey said it will fight Nixon's allegations, which it said are false. A Schering-Plough spokesperson said the company could not comment until it had viewed the lawsuit (Patrick, St. Louis Post-Dispatch, 5/11).

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