Iowa Attorney General Tom Miller is taking action over claims that drug companies have overcharged the state’s Medicaid program. “The state of Iowa has sued 78 drug companies, alleging that they inflated the cost paid by Iowa taxpayers under the Medicaid program,” Miller announced in his office Tuesday.
He claims Iowa has lost “millions of dollars” because drug manufacturers deliberately inflated their reported average wholesale price for their drugs to increase market share for their product.
“In one case, GlaxoSmithKine reported an average wholesale price for Zantac of $39.90,” Miller said. “We allege in the lawsuit that it was actually $9.80, an increase of 307 percent.” The lawsuit covers a 13 year period, between 1992 and 2005.
During that time, Miller says Iowa’s Medicaid program spent $1.6 billion for drugs, “so I think it’s safe to say that millions of dollars are stake in this lawsuit.” The 167 page lawsuit was filed Tuesday in federal court in Des Moines. Nearly two dozen other states have filed similar suits.
Miller says the state of Texas has recovered over $55 million, so far, in it’s case against drug companies. About 63 percent of Iowa’s Medicaid program is funded by the federal government, so Miller says if his office is able to recover money, a portion of that may go to the feds.
Miller adds that local pharmacies have benefited from the alleged drug company actions, but pharmacies are not being sued, because they were not responsible for reporting the average wholesale price of the drugs.