Louisiana sues Big Pharma for Medicaid fraud

Friday, November 05, 2010 by: Jonathan Benson, staff writer
Tags: Big Pharma, fraud, health news

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(NaturalNews) Numerous U.S. states have or are in the process of filing lawsuits against drug companies for ripping off their state Medicaid programs, with one of the most recent being Louisiana. According to a recent Pharmalot report, Louisiana's Attorney General Buddy Caldwell says that 18 drug companies deliberately lied in drug price information filings in order to bilk more money from the system, and he is going after them to recover it.

"This is an egregious abuse of the Medicaid reimbursement system," explained Caldwell in a official statement. "We believe Louisiana has lost hundreds of millions of dollars as a result of these drug companies' fraudulent pricing schemes."

According to the same official statement, Louisiana doled out more than $850 million in taxpayer funds to drug companies to pay for drugs between 1991 and 2009. But a significant portion of this amount was most likely fraudulent because of the billing scheme drug companies utilize to get reimbursed.

The way it works is drug companies report what are called the Average Wholesale Prices (AWPs) for drugs, and are subsequently reimbursed by state Medicaid programs for these amounts. But the lawsuit alleges that drug companies were marking up these costs as high as 6000 percent above actual costs. And since the drug companies themselves declare the AWPs and other wholesale prices, they can literally put whatever amounts they wish, even if those amounts bear no correlation to the actual cost.

In 2008, NaturalNews covered a similar lawsuit in Texas filed by its Attorney General alleging that drug companies had abused the Medicaid system ( And Kansas (, Wisconsin (, Mississippi (, and 24 other states have all been involved in lawsuits against Big Pharma as well. Even the federal government has sued drug companies for reimbursement fraud.

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