Texas Attorney General Greg Abbott alleges the drugmakers falsely represented their prices to the state's Medicaid program, which caused Medicaid to reimburse participating pharmacies at inflated prices. The manufacturers named are Watson Pharmaceuticals, Alpharma, Par Pharmaceutical and Barr Pharmaceuticals.
"Because of the manufacturers’ falsely reported prices, Medicaid reimbursed pharmacies at vastly inflated rates. The resulting windfall profits, which date back to the early 1990s, unlawfully induced pharmacies and other providers to purchase the defendants’ products, the AG's office says in a statement. Here is the lawsuit.
The probe began with a sealed whistleblower lawsuit that was filed by home-infusion pharmacy Ven-a-Care of the Florida Keys, according to the AG's office. Acting on similar information from Ven-a-Care, the AG has taken action against several drugmakers for launching similar pricing schemes.
Among them are Schering-Plough/Warrick Pharmaceuticals in May 2004 ($27 million); Dey in June 2003 ($18.5 million); Boehringer Ingelheim/Roxane Laboratories in November 2005 ($10 million); and Baxter Healthcare Corp. in June 2006 ($8.5 million). Legal actions are pending against B Braun Medical and Abbott Labs.