Illinois AG Files Suit Against 48 Drugmakers Over AWP Spreads

Illinois has become the latest state to sue multiple drugmakers for inflating drug prices by overstating the average wholesale prices (AWP) of their products under Medicaid and Medicare programs.

Illinois Attorney General Lisa Madigan recently filed a lawsuit in the Illinois Cook County Circuit Court against 48 drug companies, including the top generic and brand firms. The suit alleges the drugmakers have fraudulently published inflated AWPs for drugs for more than a decade. The inflated prices forced government healthcare programs like Medicaid, and Medicare Part B consumers in the state, to overpay for drugs by hundreds of millions of dollars, Madigan said.

The suit alleges the drugmakers inflated the AWPs -- which government healthcare plans use as a basis to reimburse health providers -- while charging much lower prices to providers, who would then pocket the difference. By exploiting the cost's spread, drugmakers would induce doctors to prescribe certain drugs and thereby increase their market share.

"Drug companies have manipulated the average wholesale price and used the prices to overcharge state and federal government programs, taxpayers and Medicare consumers," Madigan said. "We allege that this scheme is deceptive and illegal and has cost the state government and Medicare consumers millions of dollars."

The lawsuit seeks millions of dollars in restitution and actual damages to Illinois and Medicare participants. It also asks the court to order the defendants to pay all court costs, as well as civil penalties of $50,000 per violation found to have been committed with the intent to defraud. For more information, go to http://www.ag.state.il.us/pressroom/2005_02/20050208.html (http://www.ag.state.il.us/pressroom/2005_02/20050208.html).