Prescription drug manufacturer Abbott Laboratories has agreed to pay Idaho $1 million in a legal settlement resolving the state’s claims relating to the “average wholesale prices” reported by the company.
In 2007, Idaho Attorney General Lawrence Wasden sued several prescription drug manufacturers, including Abbott, to recover taxpayer money for excessive prices Idaho Medicaid paid for prescription drugs. By law, Medicaid must reimburse pharmacies at the “estimated acquisition cost” of the drug, plus a dispensing fee.
Until July 2011, Medicaid primarily used “average wholesale price,” as reported by drug manufacturers, as a basis for determining that amount. However, the reported price was often far larger than the price actually paid to the manufacturer. For example, in 2003, Abbott reported a price 26 percent higher than the actual price of the prescription drug Biaxin.
As part of the settlement, Abbott admitted no liability or wrongdoing.
Including the latest agreement, the Attorney General has recovered more than $27 million in average wholesale price settlements with 37 drug manufacturers. The case against one remaining defendant drug company is scheduled for trial in December. (Idaho AG)