UK drug giant GlaxoSmithKline has put $70 million on the table to bring an end to its battle with insurance groups and consumers in the USA over claims that it artificially inflated average wholesale prices for its drugs.
The US government employs the practice of using company-reported AWPs of drugs to calculate reimbursement rates for insurance programs, so artificially inflating these would lift drug prices and cost health plans millions of extra dollars.
In a statement, the company explained: “Government health plans chose to use AWP as a benchmark although it has been widely known for years that AWP exceeds the prices actually paid by physicians, pharmacies and others. For public policy reasons, these government health plans continued to use AWP as a benchmark for many years, and many still do. Medicare has moved away from AWP-based reimbursements in recent years, and other payers continue to weigh whether or not to retain AWP as a benchmark in their reimbursement systems.”
GSK, which strongly denies any wrongdoing, said it decided to settle “to put this historical matter behind it,” and that it has already put enough money aside to lay the suits to rest.