Federal and state officials are questioning discounts of 90 percent and more given by drug companies to certain customers, but not to Medicaid.
Federal law requires that Medicaid receive the best price offered to any customer, but makes an exception for drugs sold at a discount of 90 percent or more. It was supposed to allow charitable organizations to purchase inexpensive medicines but drug companies have been using the exception to increase their market share at certain hospitals.
The Pittsburgh Post-Gazette reprinted an April 28, 2005 Wall St. Journal article stating that two lawsuits have been filed against Merck, one of them still under seal, alleging improper discounting. A United States Dept. of Justice subpoena issued to GlaxoSmithKline seeks information on that firm’s discounting practices. The Senate committee that oversees Mediaid is also questioning drug companies on their nominal-pricing practices.
In the unsealed case against Merck, Nevada’s attorney general joined a complaint filed by a former Merck employee, alleging that the company promised hospitals a 92 percent discount on Zocor if it had a 70 percent share of their cholesterol-lowering prescriptions.