AstraZeneca Pays $2.5M To Settle AWP Lawsuit

AstraZeneca Pays $2.5M To Settle AWP Lawsuit

August 15th, 2011 // 1:12 pm @ jmpickett

Once again, a big drugmaker has made a payment to a state in order to settle charges of inflating the average wholesale prices of its medicine. This time, AstraZeneca agreed to pay $2.5 million to Idaho, which argued its citizens were harmed because the state Medicaid program unnecessarily paid too much for various drugs.

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“Where published prices are false or misleading, the taxpayers are significantly harmed by excessive Medicaid reimbursements,” Idaho Attorney General Lawrence Wasden says in a statement. “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.”

In one example cited. a unit of the Prilosec heartburn had a published average wholesale price of $4.134 in 2003, but in fact, the actual average wholesale price was $3.29. This resulted in a 26 percent difference between the published price and the actual price.

Average wholesale pricing was used by Medicaid and other government healthcare programs to set reimbursement rates, although drugmakers say the published prices do not actually reflect the true costs of the medicines. But many state and local governments have filed lawsuits against numerous drugmakers over average wholesale pricing in hopes of recouping millions of needed dollars .

AstraZeneca, for instance, is appealing a $20.5 million judgment over Kentucky’s Medicaid program. Earlier this year, a state court judge denied its request for a new trial and refused to overturn a 2009 jury verdict that the drugmaker had inflated prices (see this and this). Last year, the drugmaker paid $103 million to settle a lawsuit filed by third-party payers and consumers .

An AstraZeneca spokewoman send us this statement: “AstraZeneca has competed responsibly with respect to pricing and marketing of our medicines, and we firmly believe that we have acted at all times in accordance with the law. Although we deny liability, after years of costly litigation, we believe that this agreement was the appropriate way to resolve this matter quickly and allow the company to focus on our core mission to deliver meaningful medicines to patients.”

Source: Pharmalot