US court fines three drug firms $7.3M for overcharging Medicaid

Three pharmaceutical firms have been ordered to pay at least $7.3 million to the midwestern US state of Missouri, after being found guilty of overcharging the state's Medicaid program for prescription drugs. As with several other similar cases in other US states, the issue has involved allegations of manipulating the average wholesale price, on this occasion for three respiratory disease therapies.

As well as the damages already awarded to the Missouri authorities, additional punitive damages may be determined against the three defendants: Warrick Pharmaceutical and Schering Corp, as well as their parent company US drug major Schering-Plough. Another firm, Dey, settled with prosecutors before the trial was heard in St Louis.

An S-P spokesman argued that the AWP was a starting point for negotiations and claimed that Missouri Medicaid officials did not object to the pricing arrangements until the law suit was brought.