Suit Accuses Pharma Companies of Medicaid Price-data Manipulation

From Philadelphia Inquirer (PA) (October 8, 2011)


Oct. 08--A former executive with a pharmaceutical distributors trade group alleges in a federal whistle-blower lawsuit that 13 drug companies manipulated price data to reduce the amounts they owed federal and state governments for the taxpayer-funded Medicaid program that serves the poor.

The number of companies named as defendants has fluctuated. The original filing accused 30 companies. The fourth and most recent version of the complaint, unsealed this week in Philadelphia, accused 13 companies: Allergan, Amgen, AstraZeneca, Biogen, Bradley, Cephalon, Eisai, Genzyme, Mallinckrodt, NovoNordisk, Reliant, Sunovion, and Upsher-Smith.

The plaintiff's attorneys suggested the companies' actions cost taxpayers hundreds of millions of dollars. "We have every reason to believe this continues today," said Dan Miller, one of the attorneys.

Ronald J. Streck, former president and chief executive officer of the Healthcare Distribution Management Association, filed his original complaint in October 2008. Medicaid relies on manufacturers to self-report price data. Streck, of suburban Washington, had contracts between manufacturers and distributors that show price manipulation, Miller said. He added that Streck was brushed off by the companies when he brought the problem to their attention.

The U.S. Attorney's Office in Philadelphia notified the court earlier this year that it would not prosecute the case at this time. A spokeswoman declined to say why. As a whistle-blower, Streck could get money from a civil case if a jury ruled against the companies.

"We don't know why they didn't intervene," said attorney Jacob Goldberg, also representing Streck.

Eisai spokeswoman Lynn Kenney said: "We don't believe there is merit to this claim." Amgen spokeswoman Christine Regan said, "Amgen plans to vigorously defend against the allegations and takes its price reporting obligations to all government entities very seriously." Spokesmen for the other companies either declined comment or could not be reached.

Contact staff writer David Sell at 215-854-4506 or dsell@phillynews.com. Read his blog at www.philly.com/phillypharma.

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Posted: October 2011


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