Attorney General Sues Over Inflated Drug Prices
By: Import User
Updated: January 7, 2009
Attorney General Mike Beebe is suing drug
companies in California and New Jersey.
The lawsuit filed today alleges they intentionally misreported
pricing information on generic drugs for respiratory ailments to
increase company profits.
Named as defendants in the suit are Dey Incorporated of Napa,
California; Shering Corporation, now Shering-Plough, of Madison,
New Jersey; and Warrick Pharmaceuticals, a division of
Schering-Plough.
The lawsuit accuses the companies of violating the Arkansas
Deceptive Trade Practices Act by "defrauding" Medicare and
Medicaid programs in the state to boost market share and profits.
Prescription drug costs charged to the government programs are
based on average wholesale prices as reported by their
manufacturers.
But Beebe says the companies inflated the reported cost of the
drugs so that Medicaid and Medicare reimbursements to health-care
providers would be greater.
He says the companies then marketed the medications to
health-care providers, saying the providers could buy the drugs at
wholesale prices but be reimbursed at much higher prices.
Posted by Mike Hellgren
