Barr Laboratories Subpoenaed in Mass.
Barr Laboratories Inc. received a subpoena from the Massachusetts attorney general, the latest in state and federal probes into whether drug makers helped doctors collect inflated payments from government insurance programs.
Barr, a generic-drug maker, said it is cooperating with the request for documents related to pricing and Medicaid reimbursement and believes its practices were lawful. Earlier this week, Eli Lilly & Co. and Schering-Plough Corp. said in regulatory filings that they had received subpoenas from the Massachusetts attorney general.
The federal government’s Medicaid program, a state and federal health insurance program for the poor, bases repayment for some drugs on average wholesale prices reported by drug makers. Doctors can profit by purchasing the drugs at a discount from a drug maker and claiming reimbursements at a higher price.
Discounts given to HMOs by drug makers are required by law to be included in the calculation of the drug maker’s “best price,” on which Medicaid bases its drug reimbursements. Drug makers may be inflating the “best price” figure by excluding discount drug prices offered to private insurers, forcing Medicaid to pay more than it should for the drugs.
Shares of Pomona, N.Y.-based Barr rose 80 cents to $58.73 on the NYSE. The company’s shares have dropped 19% this year.
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