AG Van Hollen: Requests $212 million in forfeitures from pharmaceutical company

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Bill Cosh 608/266-1221

MADISON — Attorney General J. B. Van Hollen appeared today in Dane County Circuit Court to request forfeitures against Pharmacia totaling approximately $212 million, as well as an injunction requiring Pharmacia to report truthful prices. The request was based on findings by a jury in February that Pharmacia, a pharmaceutical manufacturer, caused 1.44 million violations of Wisconsin’s Medicaid fraud statute.

“The jury determined that Pharmacia was committing fraud,” Van Hollen said. “This fraud caused taxpayers, the uninsured, and third-party payers to overpay for prescription drugs. Our system depends on truthful reporting. I am asking the Court to award these forfeitures to deter future fraud and to protect taxpayers and the health care system.”

The dispositional hearing before the Honorable Richard Niess was the latest development in a case filed by the Wisconsin Department of Justice in 2004 against 36 pharmaceutical manufacturers. The court has not ruled on the matters addressed at the hearing and is not expected to today.

Under Wisconsin law it is unlawful to make representations with the intent to sell pharmaceuticals when the representations are untrue, deceptive or misleading. Each defendant company allegedly identified average wholesale prices (“AWPs”) for their drugs which were provided to a pricing compendium relied on by the Medicaid program to reimburse pharmacists.

Wisconsin law provides that a court may impose a forfeiture of not less than $100 and not more than $15,000 for each violation of the Medicaid fraud statute. Van Hollen proposed a sliding scale of forfeitures for the repeated violations that increased over time, reflecting a sanction for Pharmacia’s escalating unlawful behaviors. Additionally, he sought the injunction to ensure that the fraudulent reporting practices could not continue in the future.

Three of the 36 manufacturers named in the lawsuit have settled with the state without trial, agreeing to pay over $3 million to resolve their claims. Trials against several other manufacturers are scheduled for next year.