LOS ANGELES, Aug. 25 /PRNewswire/ -- AIDS Healthcare Foundation (AHF), the nation’s largest AIDS group which operates free AIDS treatment clinics in the US, Africa, Central America and Asia, today praised California Attorney General Bill Lockyer for filing a major lawsuit against as many as a dozen or more multi-national pharmaceutical companies accusing them of defrauding California’s Medicaid system, Medi-Cal -- which provides essential health care to poor, elderly and disabled Californians. The lawsuit, announced today in an 11am press conference at the California Department of Justice office in Los Angeles, expands upon a pending previous complaint filed a few years ago by the Attorney General against two drug companies. This latest legal action contends that the companies reported inflated drug prices that the state then relied upon to set reimbursement rates, likely costing California untold millions based on the inflated pricing data.
“We applaud Attorney General Lockyer for his efforts to hold the pharmaceutical industry accountable for such deceptive pricing practices,” said Michael Weinstein, President of AIDS Healthcare Foundation, which is a co-sponsor of the Yes on Proposition 79, the Cheaper Prescription Drugs for California Act. “It is an absolute outrage that drug companies have seen fit to engage in fraudulent pricing to pad their profits while expecting California taxpayers to foot the bill. This latest scandal is symptomatic of an industry run amok and badly in need of regulation.”
As public mistrust and anger over several ongoing pharmaceutical industry scandals such as Merck’s recent Vioxx verdict in Texas and concerns about drug safety, efficacy and affordability increase, legislators, government officials and the public-at-large are looking at ways to rein in out-of-control drug industry practices. “This November, California voters will have the opportunity to decide between two drug pricing initiatives -- Prop 78, a voluntary discount program sponsored by the drug industry that has no real teeth and will allow the industry to continue to price-gouge the state and needy Californians, and Prop 79, backed by labor, consumer and health advocates, a measure that will offer significantly deeper prescription drug discounts for twice as many Californians and will provide an enforcement mechanism to ensure that the drug companies comply.”
According to an earlier press release issued by Attorney General Lockyer’s office on January 7, 2003 announcing the original lawsuit: “The complaint was filed in Los Angeles Superior Court under California’s False Claims Act, which provides treble damages and penalties of up to $10,000 per false claim. ... In California, health care providers are reimbursed for drugs prescribed to Medi-Cal patients. The reimbursement rates are calculated using pricing data supplied by drug manufacturers. The complaint alleges that the drug makers grossly misrepresented the prices, resulting in inflated costs to the state’s $27 billion Medi-Cal program, which provides essential health care to poor, elderly and disabled Californians. The complaint was prompted by a whistleblower lawsuit filed in California by a small pharmacy, Ven-A-Care, which gathered data on the vast discrepancies between the actual prices that it was paying to manufacturers versus the over-inflated prices reported to Medicaid, which is called Medi-Cal in California. After investigating the pricing practices of more than two-dozen pharmaceutical companies participating in the state’s Medi-Cal program, the California Attorney General’s Office intervened in the case. Lockyer said he expects similar lawsuits will be filed against other pharmaceutical companies.”
Lockyer announced the filing of this anticipated additional legal action against drug companies in his Los Angeles press conference this morning.
“The California legislature had an opportunity earlier this year to pass a bill would have provided some measure of transparency on drug-industry pricing-practices -- but legislators shirked their responsibility to the people of this state and let the bill die in committee,” added AHF’s Weinstein. “California’s most important legislature -- its voters -- will have the chance to weigh in on drug pricing and policies this November at the polls. We urge voters to take control and vote ‘yes’ on Proposition 79.”
AIDS Healthcare Foundation
CONTACT: Lori Yeghiayan, AIDS Healthcare Foundation CommunicationsSpecialist, +1-323-860-5227, or mobile, +1-323-377-4312
