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Drug maker seeks reversal of $38.2 million award

The Associated Press

A drug manufacturer is asking the Mississippi Supreme Court to reverse a $38.2 million judgment for the state in a Medicaid drug-pricing lawsuit.

A judge ruled in Rankin County in 2011 that Sandoz Inc. inflated the average wholesale prices for its generic drugs.

Attorney General Jim Hood says the inflated number caused Mississippi Medicaid to lose money by paying pharmacies too much.

The Supreme Court is scheduled to hear arguments in the case on June 29.

Health care providers, typically pharmacies that participate in Medicaid, provide medication to eligible recipients. The state of Mississippi, in turn, reimburses the providers for the drugs, plus a dispensing fee. In the lawsuit, Hood claimed the state was paying too much in reimbursements based on the reported price of medicine by drug manufacturers.

Hood argued the drug companies were giving phony average wholesale prices far above the actual average price.

Sandoz attorneys argue in briefs that the company reported accurate prices and Sandoz saved the Mississippi Medicaid program millions by providing less expensive generic drugs. The company also argued Hood brought the lawsuit under Mississippi’s Consumer Protection Act but proved no harm to consumers or fraud by the company.

In 2011, Hood’s office settled a lawsuit with four drug companies: GlaxoSmithKline, Aventis, Schering/Warrick and Mylan. The suit came after allegations of Medicaid fraud and consumer protection violations related to inflation of the average wholesale price of drugs.

Dozens of such lawsuits have been filed across the country.

Sandoz is the generic-drugs division of pharmaceutical giant Novartis.

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