2010 drug lawsuit brings in $238M in settlements

BATON ROUGE, La. (AP) — Twenty-five pharmaceutical companies will pay the state $88 million to resolve allegations they charged Louisiana’s Medicaid program too much for their drugs, the final settlement reached in a 2010 lawsuit filed by Attorney General Buddy Caldwell.

Over three years of the drug-price litigation, such agreements have brought in $238 million for Louisiana, Caldwell said Wednesday, announcing the total recovery figure that includes the settlement reached this week.

Caldwell called the dollars “stolen Medicaid funds — money intended to provide care for our most vulnerable citizens.”

Wednesday’s announcement won’t provide a huge influx of new cash to address state budget gaps, however.

A large slice of the settlement dollars must be returned to the federal government, since the Medicaid program is a shared cost with the state. Also, state lawmakers spent settlement money to plug budget holes as the individual deals with drug companies were struck over the past three years.

What portion of the latest $88 million will be available for the state to spend wasn’t immediately clear. According to the state Department of Health and Hospitals, the state’s share will be less than half and possibly even lower, depending on the final calculations of what must be handed over to the federal government.

Louisiana has reached settlements with more than 100 drug companies and their subsidiaries since the lawsuit was filed.

“These companies took advantage of the state and its taxpayers by fraudulently over-pricing and marketing prescription drugs, thereby forcing the state’s Medicaid program to grossly over-pay for those prescriptions,” Caldwell said in a statement.

The attorney general’s office sued the drug makers in 2010 for fraudulent pricing and marketing of prescription medications, claiming they misreported drug pricing information to inflate reimbursement payments by the state’s Medicaid program. The accusations involved Medicaid payments made to companies more than a decade ago, according to DHH.

“In order to provide critical services to Louisiana citizens, those who work with our Medicaid program must be responsible actors. Pharmaceutical companies are no exception,” DHH Secretary Kathy Kliebert said in a statement.

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