N.Y. sues GSK, Pharmacia for bribery

Drug Store News, March 3, 2003

NEW YORK -- The New York Attorney General's office three weeks a go charged two leading pharmaceutical manufacturers, GlaxoSmithKline and Pharmacia, with bribing doctors through kickbacks, paid directly out of government health plans like Medicare and Medicaid, in order to gain marketshare for their respective medications.

Aventis has been sent a pre-litigation notice that it also may be named in the suit.

GlaxoSmithKline had responded that the state government made its bed and is now shifting blame for "public policy decisions and for budget shortfalls [onto] the pharmaceutical industry" so they don't have to lie in that bed.

"We are seeking restitution for consumers and the state and new reforms that will help maintain the integrity of the doctor-patient relationship by making sure that medical decisions are based on sound clinical guidelines, not on whether a manufacturer's drug delivers hi g her compensation to a provider," announced Attorney General Eliot Spitzer.

New York contends that the three pharmaceutical companies gave discounts to doctors and pharmacies that bought their drugs. Those doctors and pharmacies then would turn a profit out of those discounts when they applied for reimbursement under Medicare and Medicaid--for the full, non-discounted rates.

"The companies are alleged to have reported an inflated average wholesale price charged to doctors, pharmacists and other health care providers," the office of the New York State Attorney General stated. "The companies exploit this spread' to market their drugs, improperly inducing doctors to prescribe drugs and thereby increase companies' market share."

GlaxoSmithKline, on the other hand, countered that because states tie their reimbursements to average wholesale price calculations, a price tabulated and reported by third party vendors, they have "known for decades" that doctors and pharmacies are reimbursed a greater amount than what they've paid for on certain medications.

"The attorney general is trying to hold GSK and other pharmaceutical companies accountable for the state's own conscious decision to reimburse doctors and pharmacies more for drugs than they paid for them," the company stated.

Aventis, who has not yet been named a party in the lawsuit, answered nonetheless that it had ceased reporting AWP of its medications as of August 2001 because that reporting was the nexus for confusion throughout the industry. "We have always based our average wholesale price on the 'sticker' price to wholesalers," Aventis spokeswoman Patricia Munzer told Drug Store News. "To minimize confusion, we stopped reporting [AWP]," altogether she said.