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Idaho Collects Millions from Drug Companies

From Idaho Statesman (Boise) (April 6, 2011)

April 06--Some of the world's most powerful drug companies have agreed to give Idaho $34 million over the past five years.

Prescription-drug makers have shied away from fighting about 30 lawsuits brought by the state since May 2006, opting instead to fork over payments ranging from about $13,000 to $13 million each.

The biggest pot Idaho claimed so far was in a case all its own, settled in 2009. The state accused Eli Lilly of marketing Zyprexa, an antipsychotic drug, for uses that hadn't been approved by the Food and Drug Administration, and for failing to properly warn health care providers about some of the side effects of that drug.

Millions of dollars have been deposited into the state's general fund because of these cases, including about $7 million of the Eli Lilly settlement.

The most common claim that Idaho has brought in legal actions against Big Pharma is that drugmakers inflated the price of drugs sold at pharmacies, which if true would mean that Medicaid overpaid for those drugs, at taxpayer expense. That flavor of allegation was brought and resolved nine times by Attorney General Lawrence Wasden since 2005, earning $11 million in recovered costs. Three more cases that name about 20 drug manufacturers were still pending March 29 after Wasden's office announced a $1.7 million agreement with Par Pharmaceuticals over inflated pricing of drugs such as fluoxetine.

In cases that involve Medicaid, the settlement is usually divvied up in proportion to the state's 30 percent share of Medicaid payments and the federal government's 70 percent share. The state holds onto all of it, but the federal share is set aside to offset future federal payments to Idaho. A small portion of the cash often goes straight into the fund that helps Idaho's lawyers prosecute these alleged crimes.

For the multistate cases that Idaho joins, the settlement money is divided between states "generally on a per-capita basis, but there's usually some additional compensation for the lead states because they do all the work," said Bob Cooper, spokesman for the attorney general's office.

Drug companies are not admitting to a crime or wrongdoing by agreeing to settle. After the state's announcement of a nearly $1 million case last month, the drugmaker AstraZeneca said it maintained it had done nothing wrong in marketing Seroquel, and was eager to move past the lawsuit.

Other allegations in the growing list of settlements are that companies:

-- Violated antitrust laws.

-- Misbranded a drug.

-- Didn't report discounts given to hospitals, causing Medicaid to overpay in reimbursements.

-- Delayed releasing negative results from drug trials.

Another recurring complaint the state has thrown at Big Pharma is that companies gave health care providers kickbacks for prescribing their products. Those cases have mostly been multistate actions that Idaho joined.

Audrey Dutton: 377-6448

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Posted: April 2011