Down on the Pharm: (Some) Drug Makers Settle Iowa Medicaid Suit

By Tanya Roth, Esq. on November 17, 2009 | Last updated on March 21, 2019

Iowa Attorney General, Tom Miller, announced Friday that Iowa has won a first step in its medicaid lawsuit against big pharma for allegedly over-charging taxpayers for medications. Eight of the 78 drug companies sued by the state have settled for $4.3 million. After lawyers' fees and the federal government has taken its share, Iowa will be left with about $1.2 million, some of which may actually reach it's financially strapped Medicaid program. Iowa's program insures about 422,000 adults and children who are poor, pregnant, blind or disabled.

Iowa's suit, filed in October of 2007, alleges that "these companies... deliberately and unlawfully reported false drug price information in order to increase reimbursements paid by the Iowa Medicaid program and to increase the market share for their own drugs," Attorney General Tom Miller said Friday at a news conference at his office in Des Moines. The DesMoines Resgister also reports the lawsuit specifically alleged that the fraudulent prices claimed by the drug companies exceeded the real prices by "as much as 1,000% between 1992 and 2005." 

Now for the bad news. The eight settling companies are among the smallest sued by Iowa. These companies include: Dey, Inc., and with a group including Abbott Laboratories, Inc.; Amgen, Inc.; Baxter International, Inc. (and associated companies); Ben Venue Laboratories, Inc.; Boehringer Ingelheim Roxane, Inc. (and associated companies); Immunex Corp.; and Roxane Laboratories, Inc.  The suit continues against the other drug companies not parties to the settlement.

A similar settlement was reported by the state of Washington, joined by a team of states including New Hampshire, Ohio and New York. The Attorney General for Washington, Rob McKenna, announced a $124 million settlement over the classification of drugs by drug companies in a way that reduced the amount owed in rebates to Medicare. 

All settling companies in the Iowa suit deny wrongdoing. 

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