South Carolina Sues Drug Companies for Price Scheme

Ricky Bagolie

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The State of South Carolina has filed a lawsuit to recover over $40 million in taxpayer funds as the State believes several pharmaceutical companies fraudulently manipulated the prices of Medicaid and State Health Plan prescription drug claims. Attorney General Henry McMaster alleges that the pharmaceutical companies intentionally misreported the average wholesale price (AWP) of selected drugs which increased the reimbursements paid by Medicaid and the State Health Plans, thereby overcharging South Carolina taxpayers over $40 million dollars

False and inflated AWP figures for drugs provide greater financial incentives for pharmacies to buy and sell the drugs. Manipulating the average prices also provides higher sales revenue for the pharmaceutical companies, greater volume and market share for the drug companies, and dramatically steeper drug costs for Medicaid and the State Health Plan.