FORTY-SIX ATTORNEYS GENERAL URGE WITHDRAWAL
OF NEW RULE THAT WOULD ALLOW DESTRUCTION OF PHARMACEUTICAL PRICING DATA
Destruction of Documents Could Interfere with State Drug Pricing Investigations

Attorney General J. Joseph Curran, Jr., announced today that he sent a letter Tuesday to Secretary of Health and Human Services Tommy Thompson and Center for Medicare and Medicaid Services Administrator Thomas A. Scully urging them to immediately withdraw a new rule that would allow pharmaceutical companies to destroy crucial drug pricing information that could interfere with ongoing state litigation and investigations into drug pricing practices that have allegedly defrauded Medicaid programs. The Attorney General initiative was led by Massachusetts Attorney General Tom Reilly and New Hampshire Attorney General Peter W. Heed and was signed by Attorneys General from 44 states, the District of Columbia’s Corporation Counsel and Puerto Rico’s Secretary of Justice.

Under the rule - which was published in the Federal Register on August 29 and is scheduled to take effect January 1, 2004 - manufacturers would be permitted to destroy records and data used to calculate average manufacturer drug prices and best prices for government purchasers of drugs three years after the manufacturer reports the data to the Centers for Medicare and Medicaid Services (CMS) - the government entity that regulates Medicaid and Medicare programs. The manufacturer would be required to retain the records only if it was "aware" of an unresolved audit or government investigation related to average manufacturer price or best price.

"This rule could directly affect our state's ability to recoup money owed to the state Medicaid program," Attorney General Curran said. "If this rule takes effect, it could limit our ability to thoroughly investigate and prosecute the systemic and massive fraud alleged in our pending cases and ongoing investigations."

Attorneys General from the following states and jurisdictions have signed on to the letter: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii , Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, the District of Columbia and the Commonwealth of Puerto Rico.

The Attorneys General of California, Connecticut, Florida, Kentucky, Massachusetts, Minnesota, Montana, Nevada, New York, Texas and West Virginia, have brought lawsuits against various pharmaceutical manufacturers alleging illegal price manipulation and inflation. Federal law enforcement agencies and state Attorneys General, under state anti-kickback statutes and false claims laws, have ongoing civil and criminal investigations involving alleged violations of Medicaid Rebate statutes and federal kickback statutes. Cases have been filed under seal throughout the country under federal and state anti-kickback and false claims statutes.

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