NYC sues 44 drug companies alleging Medicaid fraud

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> JustSayNo

> Thu, 5 Aug 2004 20:37:23 -0400

 

> [sSRI-Research] NYC sues 44 drug companies

> alleging Medicaid fraud

>

> Reuters

>

> NYC sues 44 drug companies alleging Medicaid fraud

>

>

http://biz./rc/040805/economy_newyork_medicaid_1.html?printer=1

>

> Thursday August 5, 2:57 pm ET

> By Linda Prospero

>

> NEW YORK, Aug 5 (Reuters) - New York City filed a

> lawsuit against 44 pharmaceutical companies and

> their subsidiaries claiming it was overcharged

> millions of dollars on drugs used for its Medicaid

> program, the city's law department said on Thursday.

>

> The lawsuit charging the companies, which include

> Glaxosmithkline PLC (London:GSK.L - News) and

> Johnson & Johnson (NYSE:JNJ - News), was filed late

> Wednesday in the U.S. District Court for the

> Southern District of New York.

>

> The suits follow similar complaints filed by several

> U.S. states, including Ohio, Texas and Montana,

> which accused big drugmakers of defrauding their

> Medicaid programs by inflating drug prices. Medicaid

> is the federal health insurance program for 44

> million needy people in the United States.

>

> The city is seeking to recover its 25-percent share

> of Medicaid payments made on behalf of New York City

> residents, as well as triple damages from each

> company for the overcharges.

>

> A total amount has not yet been calculated, but it

> is likely to be millions of dollars.

>

> In 2003 alone, the federal, state and local share of

> Medicaid payments for prescription drugs, many of

> which are manufactured by the 44 companies, exceeded

> $2.3 billion.

>

> New York City's Medicaid payments, of which drug

> payments comprise a substantial share, reflect more

> than 13 percent of the entire city budget.

>

> The lawsuit alleges that the companies inflated the

> average wholesale prices of drugs used to calculate

> Medicaid reimbursements for prescription drugs, and

> that the companies underpaid Medicaid rebates

> required under federal law.

>

> The city has already filed three other lawsuits

> regarding overpricing by abuse of patent laws.

>

> " By this broader lawsuit, the city extends its

> effort to rein in the widespread fraudulent

> practices that unlawfully inflate the city's

> Medicaid costs, " Michael Cardozo, a lawyer for the

> city said in prepared remarks.

>

> Other companies named in the lawsuit include Abbott

> Laboratories Inc. (NYSE:ABT - News), Bristol-Meyers

> Squibb Co. (NYSE:BMY - News), Eli Lilly & Co.

> (NYSE:LL - News) and Merck & Co. (NYSE:MRK - News)

>