For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: May 27, 2010

Wasden Obtains $1.2 Million in Drug Pricing Settlement

(Boise) – Two prescription drug manufacturers will pay Idaho more than $1.2 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 Alpharma USPD, Inc. and Purepac Pharmaceutical Co., now known as Actavis MidAtlantic LLC and Actavis Elizabeth, LLC, 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 five average wholesale price cases with drug manufacturers, including this settlement, resulting in more than $5.1 million recovered for Idaho taxpayers. Three average wholesale price cases, naming approximately 29 other drug manufacturers, are still pending.

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