Minnesota Attorney General Sues Pharmacia for Allegedly Inflating Chemotherapy Drug Prices

Minnesota Attorney General Mike Hatch (D) on June 18 filed a lawsuit in Minneapolis-based Hennepin County District Court claiming that drug maker Pharmacia Corp. illegally overcharged the state and its residents for cancer treatments, the St. Paul Pioneer Press reports (Hughlett, St. Paul Pioneer Press, 6/19). The lawsuit claims that Pharmacia overcharged the state by inflating several cancer medications' average wholesale price and selling the medications to providers at a much lower price than what was charged to patients and Medicare or Medicaid (Gold, Wall Street Journal, 6/19). For example, Hatch said that Pharmacia charged doctors $7.75 per dose of the cancer treatment Vincasar, but listed the AWP as $742.50. Reimbursements through Medicare and Medicaid are calculated based on 5% less than the AWP (Caufield Rybak, Minneapolis Star Tribune, 6/19). Medicare typically would pay 80% of the cost of Vincasar, or about $564, and beneficiaries would pay the remaining 20%, or about $141, Hatch said (St. Paul Pioneer Press, 6/19). The prescribing physicians were allowed to keep the difference between the amount they paid for the medication and the amount of reimbursement, a practice that the lawsuit alleges "created an incentive" for doctors to choose certain chemotherapy drugs over others (Wall Street Journal, 6/19). However, Hatch said the state is not including doctors in the lawsuit because "they're not the ones who have misrepresented the AWP to the government" (Minneapolis Star Tribune, 6/19). The suit seeks $5 million to $10 million in reimbursements from Pharmacia, a portion of which would go directly to patients who allegedly overpaid for the medications. The federal government also would receive a portion of any award. Pharmacia spokesperson Paul Fitzhenry declined to comment on the lawsuit until the company has reviewed its details (St. Paul Pioneer Press, 6/19). The Journal reports that similar price-fixing lawsuits have been filed against Pharmacia by attorneys general in Nevada and Montana (Wall Street Journal, 6/19). Hatch said he expects the National Association of Attorneys General to "not be far behind in taking action" against price-fixing practices at pharmaceutical companies nationwide (Minneapolis Star Tribune, 6/19).