State gets $25 million from Medicaid drug-cost suit

State lawyers have recovered $25.2 million from five pharmaceutical companies sued over alleged inflation of Medicaid program drug costs, Louisiana Attorney General Buddy Caldwell’s office said Tuesday.

The settlements are part of major litigation involving more than 100 companies accused of improperly reporting drug price information in order to increase reimbursements paid through the state’s health insurance program for the poor.

Actavis, Boehringer Ingelheim, Dey, GlaxoSmithKline and Schering-Plough have agreed to settlements totaling $25.2 million.

The state Department of Health and Hospitals will get $20.58 million of the settlement and the Attorney General’s Office will receive $4.66 million.

Lisa Faust, DHH communications director, said some of the DHH dollars will be returned to the federal government, which provides most of the Medicaid dollars. She said the state agency had already counted on settlement dollars in its current budget plan.

Caldwell’s office filed the lawsuit in 2010. The settlements are the first since the lawsuit’s filing.

“Fraudulent over-pricing and marketing of prescription drugs caused Louisiana taxpayers and the Medicaid program to grossly over-pay for those prescriptions,” Caldwell said in a news release announcing the settlements. He called the recent settlements “the tip of the iceberg.”

The lawsuit accuses the pharmaceutical companies of committing fraud and violating the Louisiana Unfair Trade Practices and Consumer Protection Act and Louisiana’s Medical Assistance Programs Integrity Law.

Some of the remaining defendants are expected to go to trial in 19th Judicial District court in Baton Rouge later this year.

Of the settlements, those related to Medicaid damages go to DHH while those related to unfair trade practices go the Attorney General’s Office. There also is a joint fraud fund, which is split by DHH and the Attorney General’s Office.