August 26, 2005
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.