Kansas Attorney General Phill Kline recently announced he had reached a settlement with pharmaceutical giant Glaxo SmithKline to resolve allegations that it improperly inflated the “average wholesale price” paid by the state’s Medicaid program for certain of its prescription drugs.
The settlement, in conjunction with an earlier Federal Settlement and corresponding agreements in other states, resulted in Glaxo’s agreement to repay $58,065 to Kansas’ Medicaid program and to the federal government.
“The conduct at issue concerned Glaxo’s reporting of bench mark pricing data that was used by Medicare and Medicaid to set reimbursement amounts for its drugs Kytril and Zofran, injectible anti nausea drugs used in connection with chemotherapy,” explained Attorney General Kline. “Glaxo had increased the reported prices for these products to create a “spread” between what purchasers actually paid and what Federal and State health program would pay. This “spread” could then be offered as an inducement to positions or other drug purchasers to choose Glaxo products.”
As part of the settlement, Glaxo will be required to report to the Kansas Medicaid Program two certified and federally defined prices that are currently used in connection with the Medicaid rebate program and Medicare part B reimbursement. Such prices were not previously available to the state which can now use them to evaluate what it is paying for drugs and to determine if alternative reimbursement methodologies are necessary. Glaxo also must enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, and submit to monitoring of the companies compliance with law in the future.
Assistant Attorneys General in his Medicaid Fraud and Abuse Division handled the settlement for Attorney General Kline.
Source: Kansas Attorney General’s Office
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