State gets $1M for overpriced drugs
Dey Inc. settles the claim it inflated wholesale Medicaid and Medicare prices
One of 44 drug companies sued last year for allegedly bilking Hawaii taxpayers and Medicaid beneficiaries with inflated prices for prescription drugs has agreed to pay the state more than $1 million in an out-of-court settlement.
Dey Inc. of Napa Valley, Calif., agreed to pay the money and provide certain confidential pricing information to resolve the state's claim that it overstated the average wholesale prices for its drugs on which the state bases its Medicaid and Medicare reimbursement.
Attorney General Mark Bennett said he is pleased Dey voluntarily entered into discussions to settle the lawsuit.
"I hope that other drug manufacturers will see Dey's action as the proper one and join us in eliminating unfair costs to Hawaii's taxpayers," Bennett said in a written statement.
Dey is the first of the sued companies to resolve its portion of the state's lawsuit. It agreed to pay millions of dollars to settle similar lawsuits with other states since 2003 including Texas, Connecticut, Idaho, Ohio and Missouri.
In the Hawaii lawsuit, the state claims the drug companies overstated the true average wholesale prices of their products, then charged pharmacies, hospitals and doctors a much lower price to give them windfall profits and incentive to continue using their drugs over those of competitors.
The drug companies hid the true average wholesale prices of their products by giving providers secret rebates, discounts, free products and phony grants, the state claims.
Dey develops, manufactures and markets prescription drugs for the treatment of respiratory diseases and respiratory related allergies. Its drugs include Albuterol, Cromolyn Sodium, Duoneb, Epipen and Ipratroprium.