State investigating six drug makers for overcharging Medicaid program by $100 mi

Articles: State investigating six drug makers for overcharging Medicaid program by $100 mi

Posted by admin on Wednesday, July 21, 2004 - 12:59 AM

Florida's attorney general is investigating whether six makers of generic drugs overcharged the state Medicaid program by at least $100 million over the past 10 years, he said on Tuesday.
The state issued subpoenas for internal company documents that would show whether the six manufacturers sold drugs to retail pharmacies at lower prices than those quoted to Medicaid, which would be illegal, Attorney General Charlie Crist said. "We're not saying anyone has done anything wrong. That's what we want to find out," Crist said. "[The investigation] makes sure the taxpayers of Florida are not getting ripped off." Subpoenas went to Ivax Corp. in Miami, Geneva Pharmaceuticals, Mylan Laboratories, PurePac Pharmaceuticals, Teva Pharmaceuticals and Watson Pharmaceuticals. Crist asked for the documents by Aug. 16, with a goal of deciding later in the year whether to file suit on behalf of Medicaid, the state-federal health system for low-income people. Crist is following the lead of his counterparts in other states who already sued generic and brand-name drug makers for illegal pricing to Medicaid. Massachusetts was the first to file a suit, in September. None of the cases has been resolved, although one company, Schering-Plough, settled a similar suit by Texas in May. Florida has struggled for years with fraud and double-digit growth in Medicaid spending, led in recent years by rapid cost increases for drugs. The state expects to spend $2.35 billion on Medicaid drugs in its present budget, up 18.6 percent from last year. The investigation grew from state monitoring of drug prices, which found "anomalies that bear looking at," said Mark Thomas, an assistant attorney general involved in the case. When a Medicaid patient fills a prescription, Florida Medicaid pays the pharmacy the wholesale price as reported by the manufacturers, Thomas said. Under the law, that's supposed to be the lowest price available. The state found evidence that manufacturers were charging pharmacies less than wholesale prices to make their drugs more competitive, said Spencer Levine, director of the attorney general's Medicaid fraud unit. Pharmacies would make extra profit because the state reimbursed them more than they paid, giving the store an incentive to sell that drug, he said. "The taxpayers are paying that spread and increasing the market share of that manufacturer," Levine said. The state asked for pricing data on three dozen popular generic drugs, including pills for high blood pressure, depression, indigestion, mental illness, heart ailments, high blood sugar and chronic pain. Ivax was asked for its records on three of its drugs -- the heart medicine enalapril, the fluid pill furosemide and the anti-psychosis pill clozapine, state records show. "We are cooperating fully with the request for documents and believe our marketing and pricing practices were compliant with all applicable laws and regulations," Ivax said in a statement. The Generic Pharmaceutical Association had no comment on Crist's actions, other than to repeat a statement issued in September saying that its members are "committed to full compliance."

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