Iowa Attorney General Tom Miller announced a settlement today with 8 of 78 drug companies accused of overcharging the state’s Medicaid program. Miller says the companies were giving out wrong information when reporting drug prices.
Miller says they should report the average price of the drug they sell to retailers, but he says the companies have inflated and exaggerated the price they report to the states. Miller says the inflated drug prices allowed them to sell more overall. He says it’s a “perverse form or competition” where the higher price they charge, the more money the doctors and pharmacies make, and those doctors and pharmacies are then more likely to use the company’s products.
The eight companies settled with the state for $4.3 million, but that is before payments to the federal government and lawyers. Miller says about 62% will go to the federal government, the attorney fees are 12% and will drop to nine percent if the state gets more money.
So overall, the state will receive $1.2 million that will go into a fund that the legislature controls. Miller says they will keep trying to get money out of the 70 other drug companies. Miller says they hope for more settlements, but if not, the case will go to trial in Boston, Massachusetts.
Miller says he believes the lawsuits have pushed the companies to change their practices to lower the cost of drugs.