Massachusetts Subpoenas Eli Lilly in Medicaid Drug Pricing Investigation

The Massachusetts attorney general's office in March served Eli Lilly & Co. with a subpoena regarding possible Medicaid reimbursement violations, according to a quarterly financial filing released yesterday by the drug maker. Reuters/New York Times reports that Lilly is the "latest of several large drug makers to be investigated for pricing practices" (Reuters/NYT, 5/16). The inquiries concern whether the companies inflated "average wholesale prices," or the price at which wholesalers sell retailers a given medication, and then sold the drugs to providers for less in order to attract buyers. Medicaid uses AWPs to calculate reimbursements to pharmacists and doctors, whoa re able to make profits after buying the drugs for much less (Kaiser Daily Health Policy Report, 4/5). The company "did not specify which of its products was in question, but it said that it did not think it broke the law." A spokesperson did say that the investigation did not involve cancer medicines -- in recent months, Schering-Plough, Bristol-Myers Squibb and TAP Pharmaceutical Products have come under investigation over the pricing of various cancer drugs (Reuters/New York Times, 5/16).