Louisiana, Watson Pharmaceuticals Reach $8.5 Million Settlement in Rx Pricing Case
Bloomberg
August 16, 2013
Watson Pharmaceuticals has agreed to pay $8.5 million to Louisiana to resolve allegations that it inflated the cost of prescription drugs for Medicaid patients, Louisiana Attorney General Buddy Caldwell (R) announced Aug. 13 (Louisiana v. Abbott Labs., La. Dist. Ct., No. 596164, settlement 8/13/13).
The agreement was announced just as the state was about to give its opening statement to the jury in the 19th Judicial District Court, East Baton Rouge Parish, Caldwell said in a statement.
Watson Pharmaceuticals (now known as Actavis) was accused of false, misleading, and deceptive acts and practices in the pricing of prescription drug products, a violation of the Louisiana Unfair Trade Practices and Consumer Protection Act and Louisiana's Medical Assistance Programs Integrity Law.
Watson was one of more than 60 pharmaceutical companies that Caldwell sued for fraudulent marketing and pricing of prescription drugs in the Medicaid program that caused the state to pay excessive amounts for their drugs, resulting in substantial injury to the state.
The state claimed the defendants concealed true market pricing information to avoid detection of the fraudulent scheme and used undisclosed discounts, rebates, and other inducements that had the effect of lowering the actual wholesale or sales prices charged to their customers, as compared with the reported prices, the complaint said.
Settlement documents are not yet complete by the attorney general's office, spokeswoman Amanda Larkins told BNA Aug. 14.
Litigation is pending against the other defendant pharmaceutical companies, and the state is proceeding to recover funds wrongfully taken from the state, Caldwell said.
The state is prepared to present these fraud cases to Louisiana juries, Caldwell said.
A spokesman for Actavis, based in Parsippany, N.J., did not respond to BNA's request for comment on the settlement.
2011 Lawsuit
In May 2011, Caldwell initially sued original defendants Watson, Abbott Laboratories, Baxter International, Covidien Inc., Forest Laboratories, King Pharmaceuticals, Lupin Pharmaceuticals, Ranbaxy Pharmaceuticals, TAP Pharmaceutical Products, and United Research Laboratories.
The state alleged that from 1991 to 2010, each defendant knowingly, willfully, wantonly, and/or intentionally provided or caused to be provided false and inflated average wholesale price, wholesale acquisition cost, and/or direct price information for their individual drugs to various nationally known drug industry reporting services, including First Data Bank, Medical Economics, and Medispan.
Louisiana Medicaid use the defendants' published price information to determine reimbursement for pharmacy-dispensed drugs, according to the complaint. The state also alleged the defendants' drug prices greatly exceeded the actual prices at which they sold their drugs to retailers and wholesalers.
A first amended complaint added defendants Actavis, Alpharma, Apotex Corp., Barr Laboratories, Boehringer Ingelheim, Mylan Inc., Par Pharmaceutical, Perrigo Pharmaceuticals, Propst Distribution Inc., Sandoz Inc., Schering-Plough, Taro Pharmaceuticals USA Inc., Teva Pharmaceuticals USA, and Wockhardt USA Inc.
Later amended complaints added Astellas Pharma US Inc., AstraZeneca Pharmaceuticals LP, Bayer Corp., Biovail Pharmaceuticals, Bristol-Myers Squibb, CSL Behring, Eli Lilly and Co., Gilead Sciences Inc., GlaxoSmithKline, Hoffman-LaRoche Inc., Johnson & Johnson, Merck Sharp & Dohme Corp., Novartis Pharmaceuticals, Novo Nordisk, Nycomed US Inc., Otsuka America Pharmaceuticals Inc., Pfizer Inc., Sanofi-Aventis US LLC, Shionogi Inc., UCB Inc., and Wyeth LLC, among other pharmaceutical companies.
