Pennsylvania Attorney General Jerry Pappert is suing 13 major pharmaceutical companies accusing them of unlawful and deceptive pricing and sales practices in a complex scheme to raise drug prices and capture market share. The suit alleges that the firms artificially inflated the cost of their drugs, some of which were used by cancer patients and others with life-threatening illnesses.
“This scheme cost our citizens and the Commonwealth hundreds of millions of dollars in overcharges for prescription drugs,” Pappert said at a news conference. “I am seeking to return those dollars to consumers and state programs, put a stop to these practices and thereby lower the cost of prescription drugs for all of us.”
Pappert said the 42-page lawsuit, filed today in Pennsylvania’s Commonwealth Court, accuses the drug companies of participating in an unfair and deceptive marketing scheme and conspiracy that provided improper incentives to medical providers to gain market share. The lawsuit alleges that the scheme forced consumers and state agencies to pay significantly higher prices for prescription drugs as drug companies purposefully inflated the cost of those drugs.
Pappert explained that many Pennsylvania consumers purchase drugs, either by themselves or through a health plan or insurer, and are financially harmed when drug companies intentionally raise the prices of their drugs to manipulate the market. Pappert said many older Pennsylvanians, under the federal Medicare program, pay 20 percent of the cost of their drugs and thus also pay more for prescription drugs when the drug companies raise their prices.
In addition, Pappert said, Commonwealth programs and agencies that purchase drugs, including Medicaid, the Pharmaceutical Assistance Contract for the Elderly (PACE) and the Pennsylvania Employees Benefit Trust Fund, all pay for prescription drugs based on a price set by the drug companies. When the drug companies intentionally inflate that price, the companies increase the amount paid by the Commonwealth.
Pappert identified the main defendants as: TAP Pharmaceutical Products, Inc.; AstraZeneca; Bayer AG; GlaxoSmithKline, PLC; Pfizer Inc.; Amgen Inc.; Schering-Plough Corporation; Bristol-Myers Squib Company; Johnson & Johnson; Baxter International Inc.; Aventis Pharmaceuticals, Inc.; Boehringer Ingelheim Corporation, and Dey Inc. The lawsuit also lists several subsidiaries and affiliates as defendants. Pappert said he would reserve the right to take action against other companies who participate in similar alleged schemes to defraud consumers.
