BOISE -- The State of Idaho will collect $790,000 as part of a legal settlement with prescription drug manufacturer Forest Laboratories, Inc.
The company agreed to pay the amount to resolve Idaho’s claims relating to the “average wholesale prices” that the company reported.
Attorney General Lawrence Wasden's office said they have recovered more than $21 million in average wholesale price settlements with 29 drug manufacturers. Three lawsuits against seven other drug manufacturers were filed in 2007. The results of those lawsuits are still pending.
The lawsuits are aimed at recovering taxpayer money for excessive prices Idaho Medicaid paid for prescription drugs. By law, Idaho Medicaid must reimburse pharmacies at the “estimated acquisition cost” of the drug. As a basis for determining this amount, Idaho Medicaid primarily uses “average wholesale price,” as reported by drug manufacturers.
If the manufacturer reports an inflated or false average wholesale price for a drug, taxpayers can overpay for that drug through Medicaid reimbursements. For example, investigators found that one unit of Forest’s pharmaceutical product Celexa has a 28 percent difference between the published price and the actual price.
So where does the settlement money go? $185,228.21 will be deposited in the State’s General Fund to be appropriated by the Idaho Legislature. $461,030.94 will be deposited into the Cooperative Welfare Fund to reimburse the federal share of the Medicaid overpayments. Idaho will retain this money as an offset against a future federal Medicaid payment and $50,000 will go to the consumer protection account to reimburse the Attorney General for investigative and legal costs.
The settlement with Forest has been approved by the Fourth District Court in Ada County.
Forest Laboratories, Inc. has admitted no liability or wrongdoing.
