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Wisconsin AG hails major victory against Pfizer unit

February 18, 2009
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The attorney general for the state of Wisconsin announced that a subsidiary of Pfizer Inc. could pay more than $153 million to the state for artificially inflating prescription drug prices for years, reported by the Associated Press. A Dane County jury has ruled that Pharmacia Inc. had violated the state''s Medicaid fraud law more than 1.4 million times over a decade. Each violation carries a minimum of a $100 fine and a maximum of $15,000. Attorney General J.B. Van Hollen said that means the company is required to pay at least $144 million when a judge sets fines in coming weeks unless a settlement is reached. The jury also ordered the company to pay $9 million in damages to compensate the state for its losses. Pfizer spokesman Chris Loder denied Pharmacia, which was acquired by Pfizer in 2003, violated any laws or regulations. But Van Hollen said he hoped the jury''s verdict would lead to settlements worth hundreds of millions of dollars between the state and 32 other drug makers it has sued. Three companies have already reached settlements requiring them to pay more than $3 million in restitution to Medicaid and legal fees. Van Hollen said the litigation has uncovered "good evidence" drug makers knowingly inflated wholesale prices to get larger payments from Medicaid, private insurers and consumers. In some cases, doctors, hospitals and pharmacies benefited from the overcharges to Medicaid. In others, most of the money went back to the manufacturers through chargebacks from wholesalers, it said. In all, drug makers collected more than three-quarters of the retail price, Van Hollen said. Van Hollen said a settlement with Pharmacia was possible to avoid an appeal and get the state its money faster. The lawsuit only seeks to recover inflated reimbursements paid by Medicaid, the state and federal health care program for the poor, disabled, elderly and blind. It does not seek reimbursements on behalf of private insurers and other consumers who have paid the inflated prices. Van Hollen said he did not want to drive the drug makers out of business. Instead, he wants to recover the fraudulent payments, punish the companies for wrongdoing and get them to change their practices.
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