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NYC files Medicaid fraud suit against pharmaceutical companies.

The Big Apple filed a complaint on Aug. 4 in the U.S. District Court for the Southern District of New York against 44 pharmaceutical companies and their subsidiaries.

The complaint alleges that the defendants engaged in fraudulent and deceptive conduct resulting in millions of dollars of overcharges to the city's Medicaid budget. New York City alleges violations of federal and state Medicaid law, Medicaid and common law fraud, breach of contract, unfair and deceptive trade practices, and unjust enrichment.

The complaint alleges two fraudulent and deceptive schemes: first, that defendants inflated the average wholesale prices, which are used to calculate Medicaid reimbursements for prescription drugs; and second, that by reporting false, inflated, and misleading pricing information, they underpaid the Medicaid rebates that the federal Medicaid statute requires. Many of the claims alleged in the complaint have been previously substantiated by numerous federal investigators, including congressional investigations, and by federal criminal and civil actions against some of the defendants.

The city is seeking to recover its 25 percent share of Medicaid overpayments made on behalf of New York City residents. In 2003 alone, the federal, state, and local share of Medicaid payments for pharmaceuticals (including many of the drugs manufactured by the defendants) exceeded $2.3 billion. The overcharges alleged in the complaint amount to many millions of dollars, allocated among hundreds of different drugs. As permitted by state Medicaid fraud law, the city also seeks triple damages from each company for its overcharges. There were no comments from the American Pharmacists Association on the complaint.
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Title Annotation:first things first
Publication:Policy & Practice
Article Type:Brief Article
Geographic Code:1USA
Date:Sep 1, 2004
Words:256
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