GSK Under Investigation for Nominal Pricing Arrangements
The Justice Department is investigating GlaxoSmithKline's (GSK) use of nominal pricing arrangements to determine whether the pricing strategy violates Medicaid price-reporting rules.
The recently launched probe is focused on whether the discounted prices GSK offers for certain drugs qualify under the nominal price exception (NPE) to best-price reporting requirements under the Medicaid drug rebate program, GSK revealed in documents filed with the SEC. The company said it is cooperating with Justice and has provided investigators with documentation regarding nominal pricing arrangements for a number of its products.
Congress has been investigating the nominal pricing issue for nearly a year. Last April, Sens. Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.) sent letters to 19 drug companies, including GSK, asking for detailed pricing information for eight classes of drugs. The senators expressed concern that drugmakers may be using the NPE to undermine the program and artificially reduce rebates.