Office of the Attorney General
Attorney General Conway Announces $16 Million Dollar Judgment Against Drug Company

Press Release Date:  Wednesday, June 24, 2009  
Contact Information:  Shelley Catharine Johnson
Deputy Communications Director
502-696-5659 (office)

Attorney General Jack Conway today announced that a Franklin Circuit Court jury has handed down a $16 million judgment against Sandoz, the generic-drugs division of pharmaceutical giant Novartis, for defrauding the Medicaid program and Kentucky consumers by inflating the prices of their prescription drugs.

The Kentucky Medicaid program relies on published average wholesale prices (AWPs) to calculate Medicaid drug-reimbursement rates. During the trial, the Commonwealth showed that Sandoz published significantly inflated AWPs for its drugs that bore no relationship to any prices that Sandoz actually charged its customers. In some cases the published AWP price was 70 times greater than the actual price.

"I appreciate the jury’s careful consideration of this matter and am pleased that we have been able to recover money for the Medicaid program and for Kentucky taxpayers," said General Conway. "My office is committed to putting an end to this type of deception and ensuring that drug companies truthfully report their drug prices."

The Office of the Attorney General has filed suit against 47 of the nation’s pharmaceutical manufacturers alleging that the drug companies violated Kentucky’s Medicaid Fraud and Consumer Protection statutes and engaged in false and deceptive advertising.

Prior to today’s judgment, the Attorney General’s Office had settled cases with Amgen for $2.4 million, Immunex for $145,000, Bristol-Meyers Squibb for $10 million and Baxter Healthcare Corporation for $2 million.