CALIFORNIA EXPANDS PRICE-GOUGING LAWSUIT
California Attorney General Bill Lockyer has added more than three dozen pharmaceutical firms to a federal price-gouging lawsuit that accuses drugmakers of bilking the state's Medicaid program out of hundreds of millions of dollars.
Originally filed in 2003 against Wyeth and Abbott Laboratories, the lawsuit alleges that drug companies reported false prices to California, which then used the prices to establish reimbursement rates for Medi-Cal, the state's Medicaid program. Lockyer announced recently that the initial lawsuit has been amended to include 37 additional drug firms, including Aventis, Boehringer Ingelheim, Bristol-Myers Squibb, GlaxoSmithKline, Merck, Mylan Laboratories, Novartis, Schering-Plough and Teva Pharmaceutical.
The companies were added to the lawsuit "based on additional evidence gathered through ongoing investigations," according to the attorney general's office. Lockyer filed the amended complaint in the U.S. District Court for the District of Massachusetts, where California's lawsuit has been combined with similar litigation from other states.
The amended complaint alleges that the defendants, for the purpose of capturing greater market control, knowingly caused the filing of false claims for reimbursement by the state, which Lockyer said is a violation of California's False Claims Act. The lawsuit seeks damages up to three times the amount the state lost in overpayments, as well as penalties of up to $10,000 per false claim.
To view, Lockyer's complaint, go to http://ag.ca.gov/newsalerts/cms05/05-069_0b.pdf (http://ag.ca.gov/newsalerts/cms05/05-069_0b.pdf).