Utah received $1 million in settlement with drug company
Deseret News
Published: Thursday, Sept. 17, 2009 1:58 p.m. MDT
An ongoing battle between the Utah Attorney General's Office and numerous drug companies it believes are inflating drug prices led to a settlement for the state Thursday.
Utah received $1 million from Dey LP, a drug manufacturer based out of California, for allegedly "falsely inflating reported drug prices," said a press release from the attorney general's office. Ultimately, practices like these cost the state and its taxpayers, said the office's director of Medicaid fraud control, Robert Steed.
"It goes back to costing the taxpayer more and depriving resources from Medicaid," Steed said. "Health-care costs are such a high part of our budget that, unless we have accountability, we're just throwing money away."
Though Dey is a relatively small company, Steed said this victory was especially important because it was the first case settled in "several dozen" in which the state is involved.
These cases center around pharmaceutical companies that inflate their prices, overcharging the state's Medicaid program as it tries to reimburse pharmacies, Steed said.
"In many instances, those prices are so inflated that we're paying 6 to 100 percent more than we should be paying, and it adds up," Steed said.
Steed said a number of states are involved in cases regarding what are known as Average Wholesale Price issues, but Utah is "one of the few states that are actively litigating." He said this case is important because it is one Utah pursued on its own.
"There are cases where the whole country is involved in multistate settlements, but this isn't a group thing. It was Utah versus Dey Medical," Steed said. "It's unique in that perspective."
The majority of the settlement money will be returned to the state Medicaid system, Steed said, though some of it will be used to pay legal bills and costs. The Utah Attorney General's Office reported that it is negotiating with other manufacturers to reach resolutions in those cases.
— Emiley Morgan
