Thirty-six states have reached an $11 million settlement with the drug manufacturer Amgen, Inc. The agreement settles claims that the company inflated pricing data for six of its prescription drugs in a way that caused the settling states’ Medicaid programs to overpay for those drugs. New York Attorney General Eric Schneiderman, who took the lead in the case, had this to say:
There are no excuses for ripping off New York State taxpayers and defrauding our Medicaid programs. At a time when state budgets are already strained, I am committed to going after any company that rips off our taxpayers – no matter how big they are. With this settlement the message we are sending is clear: Biotechnology giants are not above the law and my office will continue to ensure that those who cheat the system are held accountable.
The drug pricing data at issue in this settlement concerns the “Average Wholesale Price” (AWP) and “Wholesale Acquisition Cost” (WAC) issues. As we have reported on numerous occasions, the Medicaid programs of most every state, including New York, have used AWP and WAC to set pharmacy reimbursement rates for pharmaceuticals dispensed to state Medicaid beneficiaries. In this case, Amgen reported inflated AWP and WAC pricing data, thereby creating an artificially inflated “spread” between the price at which Medicaid providers dispensed the named drugs and the price at which the states reimbursed providers for the drugs. Under this law in most every state that is fraudulent conduct. After creating the inflated spread, Amgen marketed that spread to Medicaid providers in order to boost Amgen’s sales of Aranesp, Enbrel, Epogen, Neulasta, Neupogen, and Sensipar. These drugs are used to treat kidney disease and cancer patients.
This settlement was part of a larger investigation into illegal marketing practices, which included promoting the drugs for unapproved uses, and illegal kickbacks schemes by Amgen. The investigation resulted in a misdemeanor guilty plea in federal court by Amgen for introducing a misbranded drug into interstate commerce. The company has now paid a total of more than $647 million in damages related to the investigations. New York’s Medicaid program received more than $19.2 million of the money.
Source: Corporate Crime Reporter
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