Louisiana Doctor Says Merck’s Marketing of Heartburn Drug Defrauded Medicare, Medicaid

A Louisiana doctor has filed a whistle-blower lawsuit against Merck, alleging the drug maker "fraudulently overcharged" the federal government for its antacid treatment Pepcid, the New Orleans Times-Picayune reports (Finch, New Orleans Times-Picayune, 1/30). The suit was filed in U.S. District Court in New Orleans in 1999 under the False Claims Act and was sealed until this month. The Justice Department has been investigating the case and will continue to do so (Peterson, New York Times, 1/31). In the suit, Dr. William St. John LaCorte contents that Merck sold Pepcid to hospitals and other providers in the New Orleans area for approximately 10 cents per pill, compared to as much as $1.65 per pill to Medicaid and other government health care programs (Adams, Wall Street Journal, 1/31). Under federal law, drug makers are required to grant the Medicaid program the lowest price (New York Times, 1/31). According to LaCorte, federal and state governments have spent "billions more" than necessary for Pepcid (New Orleans Times-Picayune, 1/30). LaCorte also claims that Merck convinced hospitals to substitute Pepcid for other treatments, often without the consent of the prescribing doctor. Once discharged, patients continued using Pepcid instead of cheaper alternatives, the suit contends (Reuters/Washington Post, 1/31). "Hospitals were the perfect focal point for Merck. You're not trying to make money in the hospital. Merck wanted the market share," Marc Vezina, an attorney representing LaCorte, said. The suit seeks "full restitution" for the alleged overcharges (New Orleans Times-Picayune, 1/30). Under the False Claims Act, damages in whistle-blower cases may be tripled, and the complainant is entitled to up to 30% of any award (New York Times, 1/31). Merck spokesperson Chris Loder said, "Merck will contest this lawsuit vigorously, and we believe that the pricing of our products is in full compliance with federal and state laws and regulations. Merck believes that the complaint is without merit" (Wall Street Journal, 1/31).