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Attorney General Recovers $238 Million from Pharmaceutical Companies Engaged in Fraudulent Drug-Pricing Scheme
Louisiana Attorney General Buddy Caldwell announced today the successful conclusion to a three year effort against more than 100 pharmaceutical companies and their subsidiaries that fraudulently raised drug prices paid by Louisiana taxpayers through the Medicaid program.
“We are proud to announce the recovery of over $238 million in stolen Medicaid funds – money intended to provide care for our most vulnerable citizens,” Caldwell stated.

In the final settlements announced in court Monday, 25 companies and their subsidiaries agreed to pay the state approximately $88.4 million. These final settlements, added to those previously announced over the three year litigation period, bring the total amount recovered to $238,139,268.

“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,” said Caldwell. “This kind of success sends a clear message to companies who don’t do business honestly. Louisiana is a pro-business state. If you play fair, come to Louisiana and do business on a level playing field. And if you don’t, stay away or suffer the consequences,” he added.

“In order to provide critical services to Louisiana citizens, those who work with our Medicaid program must be responsible actors – pharmaceutical companies are no exception,” DHH Secretary Kathy Kliebert said. “I hope that this settlement, as with previous ones successfully reached by the Attorney General’s office, sends a message to companies that they cannot charge the state more for necessary prescription medications than is appropriate. We have no tolerance for fraudulent charges made to the Medicaid program.”

Monday’s settlements bring an end to Caldwell’s 2010 lawsuit against 109 drug manufacturers in the case of State of Louisiana v. Abbott Laboratories, consolidated with State of Louisiana v. McKesson Corporation. The pharmaceutical companies named in the suit are accused of misreporting drug price information in order to improperly increase reimbursements paid by Louisiana’s Medicaid program. The Medicaid reimbursements are based on what is called Average Wholesale Price (AWP). The suit accuses the defendants of committing fraud and violating the Louisiana Unfair Trade Practices and Consumer Protection Act and Louisiana’s Medical Assistance Programs Integrity Law.

This AWP litigation was handled jointly by Louisiana Department of Justice in-house assistant attorneys general Nick Diez and Keetsie Gunnels and outside contract expert counsel led by Dee Miles of the Beasley Allen Law Firm. The state did not pay any attorneys fees to outside counsel in conjunction with this case. Nineteenth Judicial District Court Judge Wilson Fields presided over the case.

Coming soon, the attorney's general office seeks to provide a mechanism by which to take online payments for collections.