Pharmacia May Pay $212M in Medicaid Fraud Case

May 21, 2009
Pharmaceutical Technology Editors

ePT--the Electronic Newsletter of Pharmaceutical Technology

Pfizer's Pharmacia unit may be ordered to pay nearly $212 million as a result of a February 2009 Wisconsin court ruling that found the company guilty of violating the state's Medicaid fraud statute 1.44 million times.

Pfizer’s Pharmacia unit may be ordered to pay nearly $212 million as a result of a February 2009 Wisconsin court ruling that found the company guilty of violating the state’s Medicaid fraud statute 1.44 million times. Last week, Wisconsin’s Attorney General J.B. Van Hollen requested forfeitures to this amount as well as an injunction that would require the company to report truthful prices.

The $212 million would be in addition to the $9 million the company has already been ordered to pay to compensate the state of Wisconsin for monetary losses resulting from defrauding the Medicaid program and violating consumer protection laws.

According to the government’s allegations, Pharmacia published false average wholesale prices (AWPs), which caused the state to overpay for prescription drugs. According to the Wisconsin Department of Justice, “The jury verdict confirmed the allegation that Pharmacia benefited from the scheme because it was able to attract business and market its pharmaceuticals to healthcare providers by using the inflated prices to reimburse the providers far more than they actually paid for the drugs. As a result, Pharmacia increased its market share and profits. Meanwhile Medicaid was paying a price based on the grossly inflated, fraudulent AWP.”

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