"US state finds Pfizer guilty of overcharging Medicaid
18 February 2009
A jury in the US state of Wisconsin has ruled that a Pfizer unit overcharged its Medicaid programme and has ordered the firm to pay $9 million in compensation.
Pfizers Pharmacia unit stands accused of violating Wisconsins Medicaid Fraud law more than 1.44 million times and the court may award a minimum of $100 per violation up to $15,000. A hearing has not yet been scheduled to determine the amount of forfeitures that Pharmacia will have to pay the state.
This verdict confirms that Pharmacia knew when it published false average wholesale prices for its drugs it would cause the state to grossly overpay for prescription drugs, said the state's attorney general JB Van Hollen. Those fraudulent price reports cheated the taxpayers of Wisconsin," he added.
Pfizer says it will appeal the verdict. "As we have maintained all along, the reimbursement rates paid to Wisconsin pharmacists were the result of deliberate decisions by the state of Wisconsin about how best to serve its Medicaid population, Chris Loder, a spokesman for the firm, told Bloomberg.
The Wisconsin Department of Justice has filed similar claims against 35 other pharmaceutical manufacturers. Three have settled with the state, agreeing to pay over $3 million to resolve the claims.
The Wisconsin case follows similar jury verdicts in Alabama and Missouri. and there are 25 other states with some form of similar pharmaceutical pricing litigation pending. Les Funtleyder, an analyst with Miller Tabak & Co, told Bloomberg "It is an industrywide phenomenon of pharma running afoul of Medicaid rules because the rules are so complicated and also part of it is because pharma wants to get every dollar they can.
He added that it really hasnt got the attention of Wall Street yet, but you would think if there are enough cheques written, it will.