Louisiana settles Medicaid Fraud litigation for $88.4 million

posted on:
November 25, 2013

author:
Staff

category:
Fraud

Louisiana Attorney General Buddy Caldwell has reached an $88.4 million settlement with 25 pharmaceutical companies in the state’s ongoing Medicaid Fraud litigation. Beasley Allen attorneys W. Daniel “Dee” Miles, III, Clay Barnett, Roman Shaul, Chad Stewart, and Alison Hawthorne, along with in-house counsel, represented Louisiana in the litigation, which began three years ago over Average Wholesale Pricing (AWP). The lawsuit accused 100 drug makers and their subsidiaries of fraudulently inflating the price of drugs sold to states and reimbursed by Medicaid, overcharging the state.

Included in the recent settlement are Abbott Laboratories, which will pay $6.2 million; Sanofi, $7 million; Novartis and its Sandoz unit, which will pay a combined $20 million; Johnson & Johnson, $10 million; Par Pharmaceutical, $6 million; and Ranbaxy Laboratories, which will pay $5 million. Including the latest settlement, since beginning the litigation Louisiana has reached settlements totaling $238.1 million.

In a statement, Attorney Gen. Caldwell said, “These companies took advantage of the state and its taxpayers by fraudulently over-pricing and marketing prescription drugs, thereby forcing the state’s Medicaid program to grossly over-pay for those prescriptions. This kind of success sends a clear message to companies who don’t do business honestly.”

“This is another huge victory for the State of Louisiana,” Miles said. “Pharmaceutical companies overcharging for drugs to the state’s Medicaid program – a program designed to assist the state’s neediest citizens – is egregious conduct.”

The complaints were brought under the Louisiana Unfair Trade Practices and Consumer Protection Act and Louisiana’s Medical Assistance Programs Integrity Law. The cases are Louisiana v. Abbott Laboratories Inc. et al., case number 596, 164, and Louisiana v. McKesson Corp. et al., case number 567, 634, both in the 19th Judicial District Court for the State of Louisiana, Parish of East Baton Rouge.

Beasley Allen has represented other states, including Alabama, in this ongoing litigation, and continues to fight for states whose Medicaid programs were defrauded by inflated drug prices. The firm has already settled nearly $1 billion in identical claims in eight states, and expects to top that figure with more than 30 cases still pending. States the firm has represented or is currently representing include Alabama, Alaska, Mississippi, South Carolina, Utah, Kansas, Hawaii and Louisiana.

These average wholesale price cases have made a tremendous positive impact on Medicaid Agencies throughout the country. As a result of this AWP litigation, the federal government and the State Medicaid programs have recognized the gross abuse of price reporting by the pharmaceutical manufacturers in the marketplace. This fraudulent price reporting resulted in huge government waste that has now hopefully been rectified by this litigation.

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