Alabama Filed Suit against 79 Drug companies Medicaid Overcharges
Sat, 29 Jan 2005
The prescription drug industry is continuing to fleece the American taxpayer –
Alabama filed a lawsuit charging 79 drug companies – among them the giants, Eli Lilly, Pfizer, Brsitol-Myers, and Merck – for "intentionally" misreporting and inflating drug costs charged to state Medicaid programs. According to Alabama’s Attorney General, Troy King, 17 other states are suing as well.
The pharmaceutical industry operates within a culture of lawlessness and a disregard for ethical /legal prohibitions because there are no criminal penalties for pharmaceutical corporate crimes. Drug companies will continue to put peoples lives at risk by selling drugs whose hazardous side-effects they conceal. They will continue to fleece American taxpayers of their scarce health care budgets as long as pharmaceutical company CEOs don’t face prison terms for committing corporate crimes.
Fines – even in the millions of dollars – have no deterrant effect for companies that earn multi-billion dollars annually.
Like other corporate CEOs, the possibility of prison would be an effective deterrant against concealing safety data of marketed drugs, and against fraudulently inflating charges to publicly funded insurance programs.
Contact: Vera Hassner Sharav
Alabama sues over Medicaid tab Says 79 companies have overcharged state by millions
Friday, January 28, 2005
News staff writer
MONTGOMERY – The state of Alabama has sued 79 drug companies, claiming the state was overcharged millions of dollars for drugs used in its Medicaid program, officials said Thursday.
The lawsuit alleges that drug companies intentionally misreported and inflated the average wholesale prices of prescription drugs, figures used to calculate Medicaid reimbursement rates. That caused the Alabama Medicaid Agency to reimburse health care providers more than they actually paid for the drugs, the lawsuit claims.
“This practice has unfairly and artificially raised the cost of drugs to Alabama Medicaid, thereby diverting scarce resources and limiting access to life-saving medicines and other services for some of the neediest in our state,” Attorney General Troy King said.
The lawsuit was filed Wednesday in Montgomery Circuit Court and names as defendants some of the world’s biggest drug companies, including Eli Lilly and Co., Merck & Co. Inc. and Pfizer Inc.
The lawsuit did not specify damages, but Alabama Medicaid Commissioner Carol Herrmann said the amounts could be astronomical. “We believe Medicaid has lost hundreds of millions of dollars,” she said.
The Birmingham law firm of Hand Arendall is handling the litigation for the state. The firm is working on a contingency basis and will recoup up to 14 percent of any eventual settlement or judgment.
Seventeen other states have filed similar lawsuits, King said.
Pfizer spokesman Bryant Haskins said he had not seen the Alabama lawsuit but said similar claims are without merit.
“From Pfizer’s perspective, we strongly object to the allegation in these types of suits,” Haskins said.
The Alabama suit gives examples of the alleged price manipulation. Bristol-Myers reported an average wholesale price for Etoposide, a chemotherapy drug, of $136.49 when the price was actually $34.30, the lawsuit contends.
Roger Bates of Hand Arendall said the litigation could take years. None of the other lawsuits have resulted in a settlement yet, he said.
Medicaid is the joint state-federal health care safety net for the poor.
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