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

Date: February 7, 2013

Wasden Recovers $1 Million in 37th Drug Pricing Settlement

(Boise) – Prescription drug manufacturer Abbott Laboratories agreed to pay Idaho $1 million in a legal settlement resolving the state's claims relating to the "average wholesale prices" reported by the company, Attorney General Lawrence Wasden said today.

In 2007, Wasden sued several prescription drug manufacturers, including Abbott, to recover taxpayer money for excessive prices Idaho Medicaid paid for prescription drugs. Including today's settlement, the Attorney General has recovered more than $27 million in average wholesale price settlements with 37 drug manufacturers. The case against one remaining defendant drug company is scheduled for trial in December 2013.

Idaho Medicaid provides health care services, including prescription drugs, to low-income Idahoans. By law, Idaho Medicaid must reimburse pharmacies at the "estimated acquisition cost" of the drug, plus a dispensing fee. Until July 1, 2011, Idaho Medicaid primarily used "average wholesale price," as reported by drug manufacturers, as a basis for determining this amount.

However, the reported "average wholesale price" was often an inflated number, far larger than the price actually paid to the manufacturer. For example, in 2003, Abbott reported an average wholesale price 26% higher than the actual average wholesale price of the prescription drug Biaxin.

"When a manufacturer reports an inflated or false average wholesale price for a drug, taxpayers pay too much for that drug through Medicaid reimbursements," Attorney General Wasden said.

The settlement is intended to reimburse taxpayers for the excessive prices Idaho Medicaid paid for prescription drugs as a result of inflated average wholesale price reporting. Approximately $243,000 will be deposited in the state's General Fund, which is the source of money for the state's share of Medicaid prescription drug costs. Approximately $606,000 will be deposited into the Cooperative Welfare Fund to reimburse the federal Medicaid share. Idaho will retain this money as an offset against a future federal Medicaid payment. $50,000 will go to the Consumer Protection Account to reimburse the Attorney General for investigative and legal costs. That account partially funds the Attorney General's consumer protection operations.

The settlement has been approved by the Fourth District Court in Ada County. The company admitted no liability or wrongdoing.

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