Why Health Care Costs Are Out of Control-Ask the Drug Companies

US judge rules nine pharmaceutical companies overcharged for drugs
by Mark Todoruk

A federal judge ruled that nine companies, including Pfizer, Merck & Co., Novartis, Teva and Mylan, illegally sought to increase market share by selling drugs to physicians at discounts to average wholesale prices, Bloomberg reported on Thursday. US District Judge Patti Saris said the drugmakers “attempted to obtain payment from public funds on behalf of [healthcare] providers by means of a materially false statement or representation” about the prices of nine drugs.

Commenting on the case, which was filed by New York City and 42 counties in the state, Saris said “there is simply no evidence that defendants believed that the prices they reported were even true list prices.” Experts testifying for the plaintiffs indicated that records show that wholesale acquisition costs reported by the drugmakers were consistently more than 50 percent above actual acquisition costs, and sometimes more than 1000 percent above.

Spokesmen for Pfizer and Merck indicated the companies are considering appealing the ruling, which is Saris’ latest decision in the nine-year litigation over average wholesale prices. Ron Rogers of Merck said the drugmaker “and other defendants in no way benefited from these rates as they do not receive reimbursement from Medicaid.”

Pfizer’s Chris Loder said the company “disputes that any pricing information provided by its Wyeth subsidiary regarding its prescription drugs caused [the plaintiffs] to overpay.” He added that “no one was misled,” as the decisions at issue in the judge’s ruling were informed choices made by the federal government with awareness of prices being paid in the market