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Drug Makers Agreed to Settle Illinois Claims They Inflated Rates


— November 11, 2019

Companies settle Illinois’ claims they inflated drug prices without admitting to wrongdoing.


Ten well-known drug manufacturers have agreed to pay the state of Illinois $242 million to put to rest a lawsuit alleging they defrauded the state’s Medicaid program.  The settlement is a result of a 2005 lawsuit that alleged the companies inflated a benchmark used to set the rates.  The figure was announced by Illinois General Kwame Raoul.

The following companies agreed to settle: Abbott Laboratories, Inc., Aventis Pharmaceuticals Inc., Aventis Behring LLC (n/k/a ZLB Behring); B. Braun Medical Inc., Forest Laboratories, Inc., GlaxoSmithKline LLC, Johnson & Johnson, Inc., Janssen Pharmaceutical Products, LP, McNeil-PPC, Inc., Ortho Biotech Products, LP, Ortho-McNeil Pharmaceutical, Inc., Novartis Pharmaceuticals Corporation, Pfizer Inc., Pharmacia Corporation, and TAP Pharmaceutical Products, Inc.

Since 2004, Miner, Barnhill & Galland has served as outside counsel to the Office of the Illinois Attorney General in the litigation  The settlement followed the May 2019 bench trial of the State’s claims against Johnson & Johnson, Janssen Pharmaceutical Products, LP, McNeil-PPC, Inc., Ortho Biotech Products, LP, and Ortho-McNeil Pharmaceutical, Inc.

Drug Makers Agreed to Settle Illinois Claims They Inflated Rates
Photo by Jp Valery on Unsplash

A previous settlement was reached against Teva Pharmaceuticals, USA Inc. January 2019, following a bench trial.  The latest settlement resolves the State’s claims against all remaining defendants.  After the Teva settlement, former Attorney General Lisa Madigan said, “I am pleased that today’s settlement will provide $135 million for the state.  In total, as a result of my 2005 lawsuit, my office has recovered more than $436 million for the state of Illinois from drug companies that engaged in unfair conduct.”

The state’s lawsuit alleged the pharmaceutical makers “fraudulently published inflated Average Wholesale Prices seeking larger profits for themselves.” Medicaid uses the Average Wholesale Price to determine how much to reimburse for drugs prescribed to Medicaid patients.

As part of the agreement drugmaker GlaxoSmithKline would pay the state the most, at $54.65 million.  This is followed by Johnson & Johnson, which will pay $49.5 million, and Pfizer at $41 million and Novartis at $21.28 million.  Other drug companies pay outs range anywhere from $1.4 million to $18.96 million, including those for Abbott Laboratories, Abbvie, Aventis, Pharmacia Corporation, Forest Laboratories, B. Braun Medical and TAP Pharmaceuticals.

In addition to representing the state of Illinois, Miner, Barnhill & Galland has represented the states of Alaska, Hawaii, Idaho, Indiana, Kentucky, South Carolina, and Wisconsin.  The law practice has reported receiving similar settlements in the other states.  The attorneys that served as Special Assistant Attorneys General included Charles Barnhill, Jr., George Galland, Jr., Robert Libman, Benjamin Blustein, Sarah Siskind, Betty Eberle, Scott Entin, Deanna Pihos, and Dave Baltmanis.

“These companies engaged in a deceptive and illegal scheme to manipulate the drug pricing system to boost their own earnings, and the people of Illinois paid the price,” Raoul said. “I am pleased that we were able to hold them accountable for their actions and recover $678 million for the state.  My office is committed to continuing to fight on behalf of consumers to stop unfair conduct by drug companies.”

In settling, the drug makers did not admit liability.

Sources:

Settlement Stems from Attorney General’s Suit Alleging Drug Makers Fraudulently Inflated Prices for Prescription Medications, Causing Inflated Medicaid Costs

Drugmakers, IL A/G settle Medicaid drug price lawsuit for $242M

Drugmakers settle Illinois drug-pricing lawsuit for $242 million

$242 Million Settlement in Illinois AWP Litigation with Numerous Drug Companies, Bringing Total Recovery in the Case to $678 Million

Settlement Brings Total Amount Recovered in Lawsuit Against Drug Makers to $678 Million

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