KHI News Service

Kansas joins lawsuit over Medicaid rebates

AGs claims drug company withheld pricing information

By KHI NEWS SERVICE | May 10, 2010

Kansas and 16 other states are trying to join two whistleblower lawsuits against drug manufacturer Wyeth, claiming the company failed to pay hundreds of millions of dollars in rebates to state Medicaid programs.

The states filed their motion to join the lawsuits on Friday. Kansas Attorney General Steve Six announced Monday that Kanas was joining Colorado, Kentucky, Maine, South Dakota and a dozen other states seeking remedy to Wyeth's alleged failure to pay rebates on the drugs Protonix Oral and Protonix IV, proton pump inhibitors used to suppress stomach acid.

The states claim their Medicaid programs should have been afforded the same discounts for the drugs that the company gave other customers.

“We are alleging Wyeth offered massive discounts to certain customers then concealed that information from Medicaid, costing the Kansas Medicaid program much more for these drugs than the law allows,” said Kanass Attorney General Steve Six in a prepared statement.

Wyeth was acquired in October 2009 by drug giant Pfizer for $68 billion. Pfizer is the world's leading seller of pharmaceuticals.

According to Six, under the Medicaid Drug Rebate Program, drug makers must report to the government certain prices they charge customers, including the “best price” offered for their drugs.

They also are required to pay rebates to the state Medicaid programs which are calculated based on the reported discounted prices offered to other customers.

According to the Attorney General's Office, Congress created the Medicaid Drug Rebate Program to ensure that Medicaid received the same discounts offered to other large, commercial customers in the marketplace.

The lawsuits claim that between 2001 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide for the drugs in question but did not provide that information to the Medicaid programs.

"As we have stated previously, Wyeth believes it honored its contractual obligations with respect to the Best Price reports that are at issue in this litigation," said Christopher Loder, a company spokesman.