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Aug 13, 2010 2:25 PM

Conway Announces $10 Million Settlement With Drug Company

Attorney General Jack Conway announced Friday a $10 million settlement with drug manufacturer Teva Pharmaceuticals USA, Inc. and several affiliated corporations including IVAX Corporation, IVAX Pharmaceuticals, Inc., Sicor, Inc., Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc. Teva is the largest manufacturer of generic pharmaceutical drugs in the world.

This is the latest in a number of settlements and jury awards in the so-called Average Wholesale Price (AWP) lawsuits filed by the Office of the Attorney General against 46 pharmaceutical manufacturers. The Kentucky Medicaid program relies on these published AWPs to calculate Medicaid drug reimbursement rates.

The lawsuits allege that that the defendant drug companies published bogus and inflated AWPs for their drugs which did not bear any relationship to any prices that these companies actually charged their customers. The artificial “spread” between the bogus published prices and the real prices caused the Kentucky Medicaid program to pay millions of dollars more in drug reimbursements than it should have.

“During these tough economic times, it is gratifying to be able to recover money for the Medicaid program and for Kentucky taxpayers,” Conway said. “Taxpayers should not be footing the bill for these inflated drug prices and my office will continue to hold these large pharmaceutical companies accountable.”

Last year, Conway’s office received multi-million dollar awards in Franklin Circuit Court as a result of lawsuits filed against pharmaceutical giants Sandoz Inc., AstraZeneca LP and AstraZeneca Pharmaceuticals LP and GlaxoSmithKline. The jury awards and penalties in those cases totaled nearly $55 million.

Since Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $135 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.

A settlement is not an admission of liability in a civil case.

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