The state of Kentucky has prevailed in a lawsuit against Dey, in which the Basking Ridge, N.J.-based pharmaceutical company has agreed to pay the state $3.5 million to settle allegations it reported inflated average wholesale prices of its drugs, according to a news release by the Kentucky Attorney General's Office.
The Kentucky Medicaid program relies on published AWPs to calculate Medicaid drug reimbursement rates. Dey published significantly inflated AWPs for its drugs albuterol, cromolyn sodium, ipratropium bromide and other inhalation drugs used to treat asthma and chronic obstructive pulmonary disease. At times the AWPs were inflated by 1,200 percent.
Dey then created a "Reimbursement Cost Comparison Worksheet" that permitted the Dey sales force to graphically demonstrate the increased profits that Medicaid pharmacy providers would realize if they switched to Dey drugs. The combination of both practices caused the Kentucky Medicaid program to pay substantially more for Dey's drugs than the actual cost of the drugs paid by Kentucky pharmacists.
Read the Kentucky AG's news release about Kentucky's settlement with Dey.
Read other coverage about pharmaceutical fraud:
- Department of Justice Recovers $3B in False Claims Act Lawsuits in FY 2010
- Former Chairman of KV Pharmaceutical First Exec to be Banned From Healthcare Programs
- Pharmaceutical Company Mylan Settles False Claims Lawsuit With Massachusetts AG for $2.6M
The Kentucky Medicaid program relies on published AWPs to calculate Medicaid drug reimbursement rates. Dey published significantly inflated AWPs for its drugs albuterol, cromolyn sodium, ipratropium bromide and other inhalation drugs used to treat asthma and chronic obstructive pulmonary disease. At times the AWPs were inflated by 1,200 percent.
Dey then created a "Reimbursement Cost Comparison Worksheet" that permitted the Dey sales force to graphically demonstrate the increased profits that Medicaid pharmacy providers would realize if they switched to Dey drugs. The combination of both practices caused the Kentucky Medicaid program to pay substantially more for Dey's drugs than the actual cost of the drugs paid by Kentucky pharmacists.
Read the Kentucky AG's news release about Kentucky's settlement with Dey.
Read other coverage about pharmaceutical fraud:
- Department of Justice Recovers $3B in False Claims Act Lawsuits in FY 2010
- Former Chairman of KV Pharmaceutical First Exec to be Banned From Healthcare Programs
- Pharmaceutical Company Mylan Settles False Claims Lawsuit With Massachusetts AG for $2.6M