AG Gansler Secures Agreement with Drug Maker over Pricing Scheme
Amgen's artificial price spread ripped off Medicaid to boost drug sales
Baltimore, MD ( April 30, 2013) -
Attorney General Douglas F. Gansler announced today that pharmaceutical giant Amgen, Inc., has resolved allegations that it reported inflated pricing data for its prescription drugs Aranesp, Enbrel, Epogen, Neulasta, Neupogen, and Sensipar. The inflated pricing caused Maryland and the other settling states' Medicaid programs to overpay for those drugs. As a result of the agreement, Amgen will pay $10,945,425.00 of which Maryland will recover $295,630. A portion of that amount will be forwarded to the federal government, which funds a percentage of the Maryland Medicaid program.
"This major drug manufacturer manipulated pricing data to boost sales and profits at the expense of the taxpayers," said Attorney General Gansler. "When you create a false price structure and then tell a pharmacy or health care provider that a certain drug will bring them more profit, you've provided an improper incentive that perverts the health care system."
Maryland and 35 other states alleged that Amgen overstated drug pricing data and therefore inflated the "Average Wholesale Price" (AWP) and the "Wholesale Acquisition Cost" (WAC) benchmarks used by most states' Medicaid programs. The drug pricing data determines the cost – or, reimbursement rates - of the affected drugs that have been dispensed to Medicaid patients.
The inflated AWP and WAC pricing data artificially expanded the "spread" between the actual price of the named drug and the inflated price that state Medicaid programs paid to providers and pharmacies. The states further alleged that after creating the inflated spread, Amgen marketed that spread and the promise of more money it provided to Medicaid providers in order to boost Amgen's sales of the named drugs.
The agreement was negotiated by a team from the National Association of Medicaid Fraud Control Units that included attorneys and analysts from New York, California, Illinois, Indiana, and North Carolina.