Attorney General Conway Announces $16 Million Dollar Judgment Against Drug Company

Kentucky.gov: - Attorney General Conway Announces $16 Million Dollar Judgment Against Drug Company

Attorney General Jack Conway today announced that a Franklin Circuit Court jury has handed down a $16 million judgment against Sandoz, the generic-drugs division of pharmaceutical giant Novartis, for defrauding the Medicaid program and Kentucky consumers by inflating the prices of their prescription drugs.

The Kentucky Medicaid program relies on published average wholesale prices (AWPs) to calculate Medicaid drug-reimbursement rates. During the trial, the Commonwealth showed that Sandoz published significantly inflated AWPs for its drugs that bore no relationship to any prices that Sandoz actually charged its customers. In some cases the published AWP price was 70 times greater than the actual price.

"I appreciate the jury’s careful consideration of this matter and am pleased that we have been able to recover money for the Medicaid program and for Kentucky taxpayers," said General Conway. "My office is committed to putting an end to this type of deception and ensuring that drug companies truthfully report their drug prices."

The Office of the Attorney General has filed suit against 47 of the nation’s pharmaceutical manufacturers alleging that the drug companies violated Kentucky’s Medicaid Fraud and Consumer Protection statutes and engaged in false and deceptive advertising.

Prior to today’s judgment, the Attorney General’s Office had settled cases with Amgen for $2.4 million, Immunex for $145,000, Bristol-Meyers Squibb for $10 million and Baxter Healthcare Corporation for $2 million.

Beshear budget plan preserves commitments to education, health care, public safety

Kentucky.gov: - Press Release

Faced with the largest shortfall in modern Kentucky history, Gov. Steve Beshear today unveiled a proposed budget for next year that does not raise taxes on working families and businesses while preserving basic funding for classroom instruction, health care programs for the most vulnerable and key areas of public safety.

Gov. Beshear told reporters this afternoon that he is formally calling the legislature into a special session, starting June 15, to address a projected $1 billion shortfall in the legislatively enacted budget for the new year, which begins July 1. The coming budget year is also the third consecutive year that the state has had fewer dollars in revenue than projected and budgeted expenses – an unprecedented occurrence.

“My plan protects our families and businesses in this vulnerable time; preserves investments in critical priorities like education, health care and public safety,” the Governor said, “and recognizes the economy will take years to recover.”

In short, the proposed plan will be paid for by making an additional $200 million in cuts from enacted levels and utilizing more than $740 million in federal stimulus dollars, the bulk of which would go toward education and Medicaid as prescribed by law.

“Given the challenges that we will face in the next biennium, as predicted by the Consensus Forecasting Group, it is prudent that we reserve some of the stimulus money to help us address next year’s budget,” said Gov. Beshear.

“Without this money, the pain we are experiencing would be magnified many times over,” the Governor said. “We must realize, however, that this is one-time money. We cannot and should not use it to create new programs we would be unable to sustain in future years.”

Highlights of the Governor’s proposed budget plan include:

• Preserving the same amount in the coming year as last year in per pupil spending in classrooms across the state – the basic formula known as SEEK -- and funding for higher education at the same levels as the 2009 budget. “I’ll say it again and again – we cannot move forward if we take significant steps backward in spending in our classrooms,” Gov. Beshear said of his proposal. 
   
• Fully funding Kentucky’s Medicaid program, which until recently had operated with a deficit of more than $280 million. 
   
• Preserving funding for mental health services at current levels.