Fifteen U.S. states are crying foul over Wyeth's Protonix pricing. The states filed a federal complaint alleging that the drugmaker avoided millions of dollars in rebates to Medicaid programs that had bought the acid-reducing drug. The complaint alleges that Wyeth didn't give the government the same discounts it offered hospitals and other private purchasers.
As you know, drugmakers are bound by law to give Medicaid their best prices. Any discounts offered to private payers have to go to the government program, too. It's basically a mandated price-matching deal. Drug-pricing arrangements are often so convoluted, however, that it can be tough to tell just what the best price is. Volume discounts, discounts on drug B based on volume-buying of drug A, and so on.
Funny thing is, the Department of Justice has also sued Wyeth, alleging that the drugmaker deliberately avoided price-matching for Medicaid. So the DoJ must have a mathematician or two on board, eh? Nope, the feds joined a whistleblower suit. So did sixteen states.
A Wyeth spokesman told Reuters that the company stands by its actions: "The company continues to believe that its pricing calculations were correct and intends to defend itself vigorously in these actions," Wyeth's Doug Petkus said.
- read the Reuters story