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MADISON - Attorney General J. B. Van Hollen announced today that the state has reached an agreement with pharmaceutical manufacturers Amgen and Immunex in a lawsuit the Department of Justice filed against 36 pharmaceutical companies for subverting the payment procedures utilized by the Medicaid program by publishing false average wholesale prices for their drugs.
Under the terms of the agreement Amgen and Immunex agreed to pay a total of $1.7 million to settle the state's claims against them. The money will be paid to the state Medicaid program. Additionally, Amgen and Immunex will pay $300,000 as costs and fees for prosecution of the action.
Wisconsin law makes it unlawful for the defendants to make representations that are untrue, misleading or deceptive with intent to sell pharmaceuticals. Each of the defendant companies allegedly reported average wholesale prices ("AWPs") to pricing compendia for identified drugs that were grossly inflated and did not reflect the actual average wholesale prices. The Medicaid program utilized the compendia for the payment or reimbursement of pharmacists for Medicaid recipients and consequently paid substantially more than the actual cost of the drug.
"Taxpayers are footing a bill based on the inflated published price, and this lawsuit is seeking to recover the money the Medicaid program lost as a result of this deception," said Wisconsin Attorney General J.B. Van Hollen. "This all could have been easily avoided if the defendants just would have done what the law obligates them to do -- report truthful prices. This settlement brings us a step closer to making taxpayers whole."
The complaint filed in Dane County Circuit Court alleged that Amgen, Immunex and 34 other manufacturers knew when they published the false AWPs that the state would grossly overpay for the prescription drugs. Many of the defendants have been sued in other states for similar activities and Wisconsin has been coordinating its litigation with other Attorneys General and the federal government.
A trial is scheduled against another of the named defendants in the same action, Pharmacia, before Judge Richard Neiss on February 2, 2009.
A copy of the settlement agreement and release is available below: