The US government has joined in on a lawsuit against a Boehringer Ingelheim generics unit, Roxane Laboratories, which alleges that the latter “engaged in a scheme to report fraudulent and inflated prices for several pharmaceutical products.”
The US attorney's office in Boston said it has intervened in a whistleblower lawsuit originally filed by a Florida company, Ven-A-Care. The government's complaint alleges that Roxane “ from at least on or before January 1, 1996,” reported prices that, in some instances, were more than 1,000% the actual sales prices on certain of the drugs it manufactures and it is claimed that Medicare and Medicaid have reimbursed Roxane's customers in excess of $500 million for the drugs which are the subject of the complaint.
The attorney’s office noted that the difference between the inflated government reimbursement rates and the actual price paid by healthcare providers for a drug is referred to as the ‘spread’ and the larger the spread on a drug, the larger the profit or return on investment for the provider. As such, it alleges that Roxane used artificially inflated spreads to market, promote and sell the drugs to existing and potential customers.
"Fraudulent pricing practices in the pharmaceutical industry have provided illicit profits for pharmaceutical manufacturers and providers at the expense of the taxpayer," said Peter Keisler, assistant attorney general for the civil division. "Our intervention in this lawsuit is another example of our ongoing effort to combat these practices and hold its perpetrators accountable for their misdeeds."
Roxane, based in Columbus, Ohio, responded with a statement saying that “it maintains the highest ethical standards in sales and marketing practices and is committed to making generic medications available to Medicaid beneficiaries throughout the USA at prices that save the states and patients millions of dollars each year.”
The company added that it has at all times complied with “the tangle of laws and rules imposed by the federal government and the 50 states for the Medicaid programme, and has paid millions of dollars in rebates to the states on drug purchases."
Roxane concluded by noting that “we are disappointed in the government's apparent decision to join in a lawsuit filed almost ten years ago."