Idaho will get $1.9 million in a legal settlement with four prescription drug manufacturers, Idaho Attorney General Lawrence Wasden announced today. “This settlement reimburses unfair costs to Idaho taxpayers,” Wasden said, through Medicaid reimbursements. Click below to read his full announcement.

OFFICE OF THE ATTORNEY GENERAL

LAWRENCE WASDEN

For Immediate Release
August 10, 2010

Idaho to collect $1.9 million in drug pricing settlement

(Boise) – Four prescription drug manufacturers will pay Idaho $1.9 million in a legal settlement resolving Idaho’s claims relating to their reporting of “average wholesale price,” Attorney General Lawrence Wasden said.

Idaho Medicaid provides health care services, including prescription drugs, to low-income Idahoans.  By law, Idaho Medicaid must reimburse pharmacies and hospitals at the “estimated acquisition cost” of the drug.  Idaho Medicaid primarily uses “average wholesale prices,” as reported by drug manufacturers, as a basis for determining this amount.

Attorney General Wasden’s settlement with Teva Pharmaceuticals USA, Inc., Barr Laboratories, Inc., Ivax Corporation, and Ivax Pharmaceuticals, Inc. has been submitted for approval by the Fourth District Court in Ada County.  The companies admitted no liability or wrongdoing.

“Where published prices are false or misleading, the taxpayers are significantly harmed by excessive Medicaid reimbursements,” Attorney General Wasden said.  “This settlement reimburses unfair costs to Idaho taxpayers.”

If the manufacturer reports an inflated or false average wholesale price for a drug, taxpayers can pay too much for that drug through Medicaid reimbursements.  “Investigation by my office has revealed that the reported average wholesale price often is not related to the actual wholesale price paid for the drug and that reporting of inflated wholesale prices by drug manufacturers is prevalent in the industry,” Attorney General Wasden said.

Since 2005, Wasden has resolved six average wholesale price cases with drug manufacturers, including this settlement, resulting in approximately $7 million recovered for Idaho taxpayers.  Three average wholesale price cases, naming approximately 25 other drug manufacturers, are still pending.

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