Drug Manufacturer Fraud Litigation - Tuesday, December 2, 2008 14:11 - 0 Comments

Kansas Sues 13 Drug makers over Medicaid Fraud

Attorney General Steve Six has filed suit against 13 drug makers on behalf of the State of Kansas, alleging they unlawfully inflated drug costs paid by taxpayers through the state’s Medicaid program. The drug makers deliberately misreported pricing information in order to increase reimbursement from the state. The scheme was identical to what the companies have done in Alabama and other states. Attorney General Six had this to say about the lawsuit:

We believe Kansas has lost millions of dollars as a result of these drug companies’ fraudulent pricing schemes. 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’ Medicaid program has spent millions of dollars more for prescription drugs than it should have. 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 media in Kansas like the idea of an Attorney General standing up for the people of his state. The following is typical of what is being said in Kansas about this lawsuit and about the Attorney General who filed it:

It’s encouraging to know that the Attorney General’s office is keeping an eye out for the state’s best interests, which in turn benefits taxpayers. It’s a duty of the Attorney General’s office that has been placed on the back burner the past several years. And Kansans should take some small measure of satisfaction in knowing that we finally have an Attorney General who is keeping an eye out for Kansas taxpayers.

The Kansas Medicaid program spent $160 million more on prescription drugs last year than it should have. The suit alleges the price for a drug paid by the state, based on a fraudulently-reported Average Wholesale Price (AWP) and other price indicators, bears no relationship to the true price and can exceed 100% to 200% of the actual price. One example cited in the complaint involved Dey. The company reported an AWP of $44.10 for Ipratropium Bromide, yet the drug maker sold the same drug to retail pharmacists for $8.35 – a 355% difference! Another involved GSK which reported an AWP of $128.24 for Zofran, but charged $22.61- a 450% difference. I, along with Dee Miles, and Clint Carter from our firm, and the law firm of Bartimus, Frickleton, Robertson & Gory, P.C. of Kansas City, represent the Attorney General and the State of Kansas in this lawsuit.