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FOR IMMEDIATE RELEASE
May 11, 2010
States get heartburn over acid reflux drug pricing

McKenna joins suit seeking millions owed to state’s Medicaid program

OLYMPIA — Washington and 16 other states say the manufacturer of two drugs to fight acid reflux, heartburn and other stomach-related illnesses owes hundreds of millions of dollars to their Medicaid programs.

In court documents filed Friday, the states joined two whistleblower lawsuits against drug manufacturer Wyeth, which produces Protonix Oral and Protonix IV as treatments for stomach acid. The multistate lawsuit alleges that state Medicaid programs were overcharged for the drugs.

“While most drug companies play by the rules, we’re ready to confront those whose practices amount to costly abuses of taxpayer-funded health insurance programs,” Washington State Attorney General Rob McKenna said.

According to the suit, Wyeth intentionally failed to report discounted prices they were offering to large commercial customers, including hospitals. As a result, Wyeth avoided paying hundreds of millions in rebates owed to state Medicaid programs.

Under the Medicaid Drug Rebate Program, manufacturers must report the “best price” offered for their drugs and pay rebates to state Medicaid programs based on those prices.  Congress created the program to ensure that the federal and state-funded health insurance program – one of the largest purchasers of medications – receives the same discounts offered to big commercial customers.

Between 2001 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide. The states allege that under the Medicaid Drug Rebate Program, Wyeth was required to report the prices paid under these deals, and to pass along the lower prices to state Medicaid programs.

The case is being handled by AG McKenna’s Medicaid Fraud Control Unit.

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Contacts:
Janelle Guthrie, Director of Communications, (360) 586-0725

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