Merck To Pay Millions Over Mass. Allegations Of Inflated Wholesale Rate

Bloomberg Businessweek: A Massachusetts court ordered the drug maker Merck to pay $4.6 million in damages for inflating wholesale prices for generic asthma drugs. "Massachusetts claimed the companies reported inflated wholesale acquisition-cost prices for the generics, and that MassHealth, the state component of the Medicaid program, would rely on those prices for reimbursements" (McQuillen, 9/30). 

The Associated Press: More penalties could follow. In addition to the damages, "[t]he judge hearing the case, U.S. District Judge Patti Saris, is to decide later on potential penalties, which Merck said could be substantial." Also, Merck's role is a little blurry. "The three generic albuterol products involved in the case, which began in 2003, were manufactured and sold by Warrick Pharmaceuticals, a subsidiary of Schering-Plough Corp. Merck, based in Whitehouse Station, bought Schering-Plough in November 2009. Warrick closed the year before" (Johnson, 9/30).

The Wall Street Journal: Merck will "vigorously" appeal the ruling. The drug maker's top lawyer said, "We strongly believe the evidence showed that the commonwealth made informed choices about amounts it paid to Massachusetts pharmacists, and that Warrick was in no way responsible for those choice" (Becker, 9/30).

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