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MONDAY, JANUARY 31, 2005
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EDITORIAL

Alleged prescription drug overcharges needed lawsuit

Figuring out what drug companies are trying to accomplish is a perplexing task.

On one hand, they come up with a prescription drug program that will benefit the needy by cutting costs substantially or offering some drugs free. On the other, states haul them into court, accusing the companies of grossly overcharging for drugs used in the Medicaid programs, drugs which help many of the same people that need cheap prescription drugs the most.

Alabama is the 18th state to join in suing 79 drug companies. Alabama's suit alleges the companies overcharged the state's Medicaid agency millions for medications.

According to a lawsuit filed Wednesday, the companies have allegedly given Alabama and the other states a significantly higher price than the actual wholesale price that should be charged.

The suit specifically alleges that Bristol-Myers reported an average wholesale price for Etoposide of $136.49 when it was actually $34.30 — a 298 percent spread.

This loss comes at an especially bad time for Alabama. Funds for all state agencies remain low, especially for the Medicaid program. Our legislators must find an additional $129 million this year to keep the agency operating at current levels. That $129 million will be used to match federal funds on a 3-1 basis.

If the state wins, it would have to give about 70 percent of the compensatory damages to the federal government.

Even if the 79 drug companies are found in the wrong, don't look for anything to happen this year. It will take at least that long for it to reach the courts. And, if the companies are ruled in the wrong, it might take years of appeals before any dollars can come back to Alabama and the other states filing suit.

With suits such as this being filed, it remains difficult to understand how these companies can do good and then turn around and, if the charges are true, be found guilty of dipping their hand into the state Medicaid till by overcharging.

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