(The Times-Picayune) – Louisiana Attorney General Buddy Caldwell has filed a lawsuit in East Baton Rouge Parish District Court alleging that 18 drug companies have ripped off state taxpayers by overcharging the Medicaid program.

The suit says that the companies misreported their drug prices in a deliberate effort to increase the payments they receive from the Louisiana Medicaid system. Under federal law, Medicaid payments to drug providers are derived using a series of pricing levels – wholesale acquisition cost, average wholesale and non-wholesale price – that the companies disclose to reporting services that in turn provide the information to state governments.

As part of the joint state-federal Medicaid program, the state of Louisiana paid pharmaceutical providers more than $850 million last year. The drug coverage typically comprises about 15 percent of the total Medicaid budget. The lawsuit alleges that some average wholesale prices were as much as 6,000 percent higher than the drugs’ true cost.

The suit suggests that the inflationary pricing practices reach back as far as 1991, but the suit does not put an exact dollar figure on what the state believes it is due.

Block Law Firm of Thibodaux and Beasley, Allen, Crow Methvin, Portis & Miles of Montgomery, Ala., signed the suit, along with Caldwell. Beasley Allen is among the nation’s leading plaintiffs firms. Attorneys working on this case from Beasley Allen are W. Daniel Miles, III, head of the firm’s Consumer Fraud Section, Roman Shaul, and Alison Douillard.

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Listen to Louisiana AG Buddy Caldwell interview.



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