Media Center

Van Hollen Announces Settlement Against Pharmaceutical Manufacturers Alleging Average Wholesale Price Manipulation

 

MADISON - Attorney General J. B. Van Hollen announced today that the state has reached an agreement in the litigation charging 36 pharmaceutical manufacturers with defrauding the Wisconsin Medicaid program. A Department of Justice law enforcement action pending in Dane County alleges that the companies reported fictitious prices to deceive the Medicaid pharmaceutical reimbursement system to increase market share.

 

Under the terms of the agreement announced today four related defendants Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Roxane, Inc., Ben Venue Laboratories, Inc., and Roxane Laboratories, Inc. paid a total of $7,750,000 to settle the state's claims.  The payment comprised $7,000,000 in restitution to the Medicaid program and $750,000 in costs and fees for prosecution of the action.

 

Wisconsin law makes it unlawful for any person 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.

 

"This settlement again demonstrates to anyone who attempts to defraud medical assistance programs that my office will pursue them to the fullest extent of the law and hold them accountable," stated Van Hollen.  "Wisconsin's taxpayers are genuinely concerned and willing to provide for our neediest citizens.  What we're not willing to do is to line the pockets of those who would engage in deceptive and fraudulent pricing activities."

 

The case has a long and complicated procedural history.  The original complaint was filed in Dane County Circuit Court in 2004 and alleged that manufacturers knew when they published the false AWPs that the state would grossly overpay for the prescription drugs. 

 

The most recent settlement is another step toward successful conclusion of the complex litigation.  

 

In February, 2009, after a two week trial a jury verdict against Pharmacia found $9 million in damages.  The court subsequently assessed forfeitures, costs, and fees and ordered the company to pay a total of over $22 million.  Pharmacia appealed the order and the litigation in Dane County has been stayed pending the results.   

 

In addition, Baxter Healthcare Corporation, another of the defendants, settled the claims against it with an agreement and payment of $1.05 million to Wisconsin Medicaid.  Still two other defendants, Amgen, Inc., and Immunex, settled with the state in December, 2008, including payment of a total of $2 million to Wisconsin Medicaid.

 

A copy of the settlement is available at:

 

2010 file: