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Idaho gets $1.9 million from drug companies for overpriced medications

Idaho gets $1.9 million from drug companies for overpriced medications

Idaho Freedom Foundation staff
August 10, 2010

Four prescription drug companies will pay the state of Idaho $1.9 million as part of a legal settlement over wrongly priced medications used by the state’s Medicaid program.

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

The state filed a lawsuit against the four drug companies related to the average wholesale price of drugs used by Idaho Medicaid patients.  The state repays hospitals and pharmacies based on those prices.  If those prices are inflated or wrong, taxpayers would be on the hook for more money being paid out by Medicaid.

The four drug manufacturers, Teva Pharmaceuticals, Barr Laboratories, Ivax Corporation, and Ivax Pharmaceuticals, agreed to the settlement, which includes no admission of wrongdoing.

The attorney general’s office has recovered approximately $7 million in similar settlements since 2005, and has three more cases pending.  One of those cases, a $1.2 million settlement, was resolved in May.

Wasden said that falsely reporting drug prices is a common practice.  “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,” he said.

This year, the attorney general’s office has also retrieved money in settlements involving cholesterol drugs and price fixing by orthopedists.

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