Office of the Attorney General
Attorney General Conway Announces $3.5 Million Settlement with Asthma Drug Manufacturer Dey, Inc.
Attorney General Jack Conway today announced a $3.5 million settlement with generic drug manufacturer Dey, Inc. to resolve allegations Dey published inflated or bogus average wholesale prices (AWPs) for its drugs. Dey manufactures and markets the popular drugs Albuterol, Cromolyn Sodium, Ipratropium Bromide and other inhalation drugs used to treat asthma and chronic obstructive pulmonary disease.
The Kentucky Medicaid program relies on published AWPs to calculate Medicaid drug reimbursement rates. Dey published significantly inflated AWPs for its drugs that bore no relationship to any prices that Dey actually charged its customers. This created an artificial "spread" between Dey's published prices and the bogus prices. At times this artificial "spread" exceeded 1,200 percent.
Dey then marketed this artificial spread to its customers by creating a "Reimbursement Cost Comparison Worksheet" that permitted the Dey sales force to graphically demonstrate the increased profits that Medicaid pharmacy providers would realize if they switched to Dey drugs with higher spreads. These deceptive practices caused the Kentucky Medicaid program to pay substantially more for Dey's drugs than the actual cost of the drugs paid by Kentucky pharmacists. Dey has already settled with the federal government, so Kentucky will retain the full amount of the settlement.
"My office is committed to ensuring that drug companies truthfully report their prices," General Conway said. "Companies that inflate their drug prices are not only breaking the law, they are stealing money out of taxpayers' pockets."
This settlement is the latest in a number of settlements in lawsuits filed by the Office of the Attorney General against 47 major drug companies. Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded nearly $145 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
The Attorney General's Tip Line for reporting allegations of Medicaid fraud is 1-877-228-7384.