Office of the Attorney General
Attorney General Conway Announces Multi-Million Dollar Settlement with Drug Company

Attorney General Jack Conway today announced a $2 million settlement with Deerfield, Ill., pharmaceutical manufacturer Baxter Healthcare Corporation, a subsidiary of global healthcare company Baxter International, Inc. Baxter is one of the largest manufacturers in the world of intravenous solutions and products used in the delivery of fluids and drugs to patients.

The Kentucky Medicaid program relies on published average wholesale prices (AWPs) to calculate Medicaid drug-reimbursement rates. Baxter published significantly inflated AWPs for its intravenous solutions that bore no relationship to any prices that Baxter actually charged its customers. This created an artificial "spread" between Baxter’s published prices and the real prices. At times this "spread" exceeded 1,300 percent, which caused the Kentucky Medicaid program to pay substantially more for Baxter’s drugs than the actual cost of the drugs.

"Taxpayers are footing the bill for these inflated drug prices, and my office is seeking to recover the money the Medicaid program lost as a result of this deception and overpayment," said General Conway. "All of this could have been easily avoided if Baxter and the other defendants would have done what the law requires - report truthful prices."

This settlement is the latest in a number of settlements in lawsuits filed by the Office of the Attorney General against 47 pharmaceutical manufacturers. To date the Office of the Attorney General has settled cases with Amgen for $2.4 million, Immunex for $145,000 and Bristol-Meyers Squibb for $10 million. A settlement is not an admission of liability in a civil case.

Additionally, General Conway announced last week a $16 million verdict in Franklin Circuit Court against generic-drug giant Sandoz for defrauding the Medicaid program and Kentucky consumers by inflating the prices of their prescription drugs.

Since January 2008 when General Conway took office, the Office of the Attorney General has collected $59 million for the Medicaid program and for Kentucky taxpayers.