In a week dominated by wrangling over lawsuits, another legal battle is

brewing in the USA as California’s attorney general announced plans to sue

pharmaceutical companies over their pricing practices.

Bill Lockyer is taking action against 39 pharmaceutical companies claiming

that they have defrauded California through a drug pricing scheme “that has

forced the state’s Medi-Cal programme to pay artificially inflated rates,

resulting in a loss of potentially hundreds of millions of dollars.”

Firms named in the lawsuit in addition to Abbott Laboratories and Wyeth (see

below) include many of the industry’s big names, eg Amgen, Aventis,

Boehringer Ingelheim,Bristol-Myers Squibb, GlaxoSmithKline, Merck KGaA,

Mylan, Novartis and Schering-Plough.

Mr Lockyer issued a statement saying that “we’re dragging these drug

companies into the court of law because they’re gouging the public on basic

life necessities. This may be a bitter pill for the drug companies to

swallow, but the days of prescription pricing fraud are over. We’re seeking

immediate legal relief.”

Mr Lockyer’s suit alleges that prices were manipulated resulting in inflated

costs to the state’s $34 billion Medi-Cal scheme, which provides health

insurance for the poor, arguing that “the amount of money that drug

companies have cheated out of California could have been better spent on

ensuring that every child in this state has access to health care.”

Mr Lockyer says his action was prompted by a whistleblower lawsuit filed in

California by a small pharmacy, Ven-A-Care, alleging that the pharmaceutical

manufacturers provided false and misleading information that the Medi-Cal

programme relied upon to establish its drug payment rates.

An investigation by the Attorney General into Ven-A-Care’s allegations led

to him filing a suit in Boston against Abbott and Wyeth in 2003 and this

latest filing is an amendment to that complaint. In one case, cited in the

2003 lawsuit, Abbott reported a reimbursement price of $49.42 for a gram of

the antibiotic vancomycin, but charged pharmacies just $8.06.

At the time of writing, none of the drugmakers named had commented on the