German drugmaker, state of Wisconsin reach $7M settlement on suit alleging Medicaid fraud

Drugmaker settles price-fraud lawsuit with Wis.

MILWAUKEE — A German-based pharmaceutical company has agreed to pay $7.75 million to settle allegations that four of its subsidiaries committed price fraud, Wisconsin Attorney General J.B. Van Hollen said Tuesday.

The four companies are part of Boehringer Ingelheim Corp., headquartered in Ingelheim, Germany.

The subsidiaries were accused of reporting inflated drug prices to the agencies whose data are used to determine Medicaid reimbursements, resulting in Medicaid paying more than the actual price of the drug.

As part of the settlement, the companies will pay $7 million to Wisconsin and cover another $750,000 in the state’s legal costs.

Amy Kunkel, a spokeswoman for subsidiary Boehringer Ingelheim Pharmaceuticals Inc. in Ridgefield, Conn., said the company complies with all federal and state Medicare and Medicaid guidelines.

“This case was settled to end expensive and disruptive litigation in which the company maintained its stance of no wrongdoing,” Kunkel said, speaking on behalf of the four subsidiaries involved in the lawsuit.

The other three subsidiaries are Boehringer Ingelheim Roxane Inc. and Roxane Laboratories Inc., both in Columbus, Ohio; and Ben Venue Laboratories Inc. in Bedford, Ohio.

Boehringer Ingelheim makes products including Flomax, which is used to treat urinary symptoms related to an enlarged prostate, and Spiriva, used to treat respiratory problems. A number of its other products treat heart disease, AIDS and Parkinson’s disease.

Van Hollen said the settlement reflects the vigor with which his office would pursue drugmakers who attempt to defraud Wisconsin taxpayers.

“Wisconsin’s taxpayers are genuinely concerned and willing to provide for our neediest citizens,” he said in a statement. “What we’re not willing to do is to line the pockets of those who would engage in deceptive and fraudulent pricing activities.”

His predecessor, Peg Lautenschlager, sued 36 prescription drug companies in 2004 accusing them of inflating wholesale prices to get larger payments from Medicaid, private insurers and consumers.

Amgen Inc., Baxter Healthcare Corp., Immunex Corp. have already reached settlements.

A case against Pharmacia Inc. went to trial, where a jury last year found that the drugmaker violated the state’s Medicaid fraud law 1.44 million times over a decade. After reviewing the evidence, the judge found the actual tally was 4,578 and ordered the company to pay $22.4 million in forfeitures and other costs.

Pharmacia has appealed the ruling.

The judge has ordered a stay of court trial proceedings in the other 28 cases until the Pharmacia appeal is heard, said Bill Cosh, a spokesman for the Wisconsin Department of Justice.

On the Net:

Copy of settlement: www.doj.state.wi.us/news/files/BoehringerSettlementAgreement.pdf

Dinesh Ramde can be reached at dramde(at)ap.org.