Office of the Attorney General
Attorney General Conway Announces $6.5 Million Settlement with Generic Drug Manufacturer Mylan
Attorney General Jack Conway today announced a $6.5 million settlement with pharmaceutical manufacturers Mylan Laboratories, Inc. and Mylan Pharmaceuticals, Inc. over allegations the companies published false average wholesale prices (AWPs) for their drugs.
Headquartered in Pittsburgh, PA, Mylan is the largest U.S.-based generics manufacturer in the world and provides products to customers in more than 150 countries and territories around the world. Mylan's product portfolio consists of more than 1,000 individual products, the bulk of which are generic medications.
The Kentucky Medicaid program relies on published average wholesale prices ("AWPs") to calculate Medicaid drug reimbursement rates. Mylan published significantly inflated AWPs for their drugs that bore no relationship to any prices that any of their customers actually paid for the drugs. This created an artificial "spread" between the inflated published prices and the real prices. Some of these spreads exceeded 8,000%.
Mylan then used these spreads as a sales tool to market the drugs to their customers, thereby increasing company profits and Mylan's market share in the pharmaceutical industry.
"These deceptive practices caused the Kentucky Medicaid program to pay substantially more for Mylan's drugs than it actually cost Kentucky pharmacies to acquire them," said General Conway. "Taxpayers should not be footing the bill for inflated drug prices."
The United States has already settled the federal claims against Mylan, so Kentucky will retain the entire $6.5 million of the settlement proceeds. This is the latest in a number of settlements in lawsuits filed by the Office of the Attorney General against 46 major drug companies over average wholesale prices.
Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $180 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
A settlement is not an admission of liability in a civil case. The Attorney General's Tip Line for reporting allegations of Medicaid fraud is 1-877-228-7384.