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Medicare Compliance & Reimbursement

Enforcement Watch:

Big Apple Says AWP Is More Than It Can Chew

Published on Thu Aug 26, 2004

Allegations could signal another round of pharmaceutical settlements.

States looking for a big boost to their Medicaid budgets may have found their new battle cry: Average Wholesale Price.
 
New York City spearheaded the effort in a complaint filed Aug. 5 against 44 pharmaceutical companies. The city claims drugmakers overcharged the New York Medicaid program millions by inflating the AWP and underpaying rebates on hundreds of different drugs.
 
"Many of the claims alleged in this complaint have been substantiated by numerous federal investigations, including Congressional investigations, and by Federal criminal and civil actions against some of the defendants named in the complaint," according to a release from the New York City Law Department Office of the Corporation Counsel.
 
The city seeks to recover its 25-percent share of Medicaid overpayments as well as triple damages from each company for its overcharges.
 
The suit adds to three prior lawsuits the city filed against Purdue Pharma, GlaxoSmithKline PLC and its affiliate, SmithKline Beecham Corp. The suits allege patent-law abuses for Oxycontin, Paxil and Augmentin.
 
To see the list of defendants in the latest suit, go to http://www.nyc.gov/html/law/pressreleases/pr080504.pdf.
 
Lesson Learned: New York suit could mean drugmakers will spend more time in the courts.
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