California Attorney General Bill Lockyer filed suit against 39 pharmaceutical companies, alleging they manipulated prices to artificially increase the reimbursement rate paid by the state’s Medicad program, called Medi-Cal.
The case will be consolidated with those filed by other states in federal court in Boston. The central claim is that drugmakers have manipulated the average wholesale price of a new drug, setting it higher than it should be to maximize profit. In one example, Lockyer showed reporters a drug that pharmacies purchased $2.82 but were reimbursed $31.83 from Medi-Cal.
The San Francisco Chronicle reported on the lawsuit on August 26, 2005.