Swine flu vaccine supplier has to pay back millions

www.guardian.co.uk

US pharmaceutical giant Baxter accused of overcharging Medicaid programmes

A company producing swine flu vaccine for Britain has paid millions of pounds in out-of-court settlements after being accused of fraudulently overcharging for medicines.

Baxter, the US pharmaceutical giant, reached at least seven huge settlements over the past 12 months, some of them for millions of dollars. The company had been accused of fraud amid allegations that it had overpriced medicines by as much as 1,300%.

The disclosure comes days after Baxter’s vaccine, Celvapan H1N1, was given approval by the European Medicines Agency and will raise fears about the growing costs of the swine flu pandemic. Vaccines are expected to cost the government £155m over the next four years.

Baxter became involved in prolonged litigation after being accused of fraudulently overcharging Medicaid, the US health programme that provides a safety net for the poorest families. Executives from the company paid out $2m to the Kentucky state government this year. Jack Conway, the Kentucky attorney general, said: “All of this could have been easily avoided if Baxter… had done what the law requires: report truthful prices.

“Taxpayers are footing the bill for these inflated drug prices, and my office is seeking to recover the money the Medicaid programme lost as a result of this deception and overpayment.”

Medicaid relies on published average wholesale prices (AWPs) to calculate the cost of medicines which pharmaceutical companies then provide at a reduced rate. But several US states have accused a series of pharmaceutical companies of grossly overinflating the AWPs. Seven other states have reached settlements with Baxter: Texas, Alabama, California, Hawaii, Alaska, Illinois and Wisconsin. Read full article…

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