Arizona sues 20 drug companies - East Valley Tribune: News

Arizona sues 20 drug companies

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Posted: Wednesday, December 7, 2005 10:43 am | Updated: 7:53 am, Fri Oct 7, 2011.

The state sued 20 major drug manufacturers and their subsidiaries Tuesday, claiming they defrauded Arizonans and their health insurers out of tens of millions of dollars through inflated — and purely artificial — posted drug prices.

In a 204-page complaint filed in Maricopa County Superior Court, Attorney General Terry Goddard said these companies list "average wholesale prices" far above what they actually charge for the drug.

What makes that significant is individuals and insurance companies are being billed — and paying — a percentage of that artificial price. And those differences can be huge.

Goddard listed spreads between the real price and the posted one that were double, triple — and more. For example, he said one company listed its average wholesale price for an anti-anemia drug at $184.40 while the U.S. Department of Justice determined it actually was available for $2.76.

And other companies were selling sodium chloride — essentially a sterile salt solution used as a flush — for less than $4 a dose while listing prices in excess of $670.

Doctors and pharmacy benefit managers could also find themselves in legal trouble. The suit claims they also are aware of — and benefit from — the artificial system.

None of the drug companies could be reached late Tuesday.

Health care companies use the average wholesale price as an indicator of the real cost of the drug. That, usually minus some negotiated discount, becomes the amount insurers reimburse doctors and pharmacy benefit managers.

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