BOISE, Idaho (KIFI) - Attorney General Lawrence Wasden announced Idaho has joined with other states and the federal government to settle allegations that Bristol-Myers Squibb Company overcharged the state Medicaid programs for drugs.
The investigation resulted from a qui tam action filed in the United States District Court for the Eastern District of Pennsylvania under the federal False Claims Act and various state false claims statutes.
Bristol-Myers Squibb, a New York-based pharmaceutical manufacturer, has paid the states and the federal government $75 million to resolve allegations against the company.
Pursuant to the settlement, Idaho received $86,102 in payment on September 7, 2021. Of that, $42,809 will be directed to the Department of Health and Welfare for state Medicaid restitution. The rest will go to the state’s general fund.
Specifically, these settlements resolve allegations that Bristol-Myers Squibb underpaid drug rebates owed to the states. Under a federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs. The rebate program is designed to ensure that states pay competitive prices for drugs, and the rebates for a manufacturer’s drugs are calculated based on a percentage of the average prices drug wholesalers pay for each of the drugs. This average price, which the manufacturer reports to the federal government, is known as the Average Manufacturer’s Price or “AMP”. The greater the AMP reported by the manufacturer, the greater the rebate the manufacturer must pay for that drug.
The whistleblower’s complaint alleged that Bristol-Myers Squibb improperly treated certain fees paid to wholesalers as “discounts,” and improperly failed to include certain “price appreciation” amounts it received from wholesalers in its AMP calculations, and that the effect of these accounting practices was to falsely decrease the AMP the companies reported to the federal government and improperly decrease the rebates paid to the states. The claims resolved by the settlement are allegations only; there has been no determination of liability.
A National Association of Medicaid Fraud Control Units (NAMFCU) Team participated in the investigation and conducted the settlement negotiations with Bristol-Myers Squibb on behalf of the states and included representatives from the Offices of the Attorneys General for the states of California, Florida, New York, North Carolina and Texas.