State reaches $82 million drug settlement

Pharmaceutical companies faced lawsuit over drug prices

 UPDATED 5:12 AM HST Oct 06, 2010
HONOLULU -

The state of Hawaii has reached an $82 million settlement with pharmaceutical companies accused of over-charging the state's Medicaid program.

In 2006, the state sued more than 40 pharmaceutical companies in an effort to stem soaring drug prices. The state accused the companies of fraudulently submitting inflated average wholesale prices to Hawaii.

The case dragged on for four years before the drug companies settled.

"This scheme went on for more than a decade, but the feds didn't see it. We didn't see it," Hawaii Attorney General Mark Bennett said. "We did go after it vigorously and I think the recovery is a deterrent to this happening again."

Settlement Breakdown: Merck Sharp & Dohme Corp. $28 million AstraZeneca Pharmaceuticals LP, AstraZeneca LP, GlaxoSmithKline LLC, and Novartis Pharmaceuticals Corp. will collectively pay $10 million Pfizer Inc. and Pharmacia Corp. will collectively pay $8.2 million Teva Pharmaceuticals USA Inc., Barr Laboratories Inc., Ivax Corp., Ivax Pharmaceuticals Inc., and Sicor Pharmaceuticals Inc. will collectively pay $6.5 million Johnson & Johnson, Janssen Pharmaceutical Products, Ortho Biotech Products, McNeil-PPC Inc. and Centocor Inc. will collectively pay $5.2 million

More than $12 million will go toward attorneys' fees.

A substantial portion will of the settlement will also go to the federal government, which paid a large amount of the drug costs. It is unclear how much the state will receive, but any settlement money will go into the state's general fund.

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