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BOSTON &38212; The Commonwealth of Massachusetts will collect $2.9 million under a settlement with generic pharmaceutical maker Dey Inc., one of 13 companies the state sued for allegedly inflating drug prices bought by the Massachusetts Medicaid program. The settlement also calls for the Napa, Calif.-based Dey to give Massachusetts a 5% rebate on future purchases for the next five years. The Commonwealth of Massachusetts v. Mylan Laboratories Inc., No. 03-11865 (D. Mass.) Massachusetts claimed that Dey inflated the so-called “wholesale acquisition cost” (WAC) it reported to national price reporting services. This action led the Massachusetts Medicaid program to pay too much for Dey drugs that went to Medicaid recipients. “We will not allow pharmaceutical companies to unfairly game the Medicaid price reporting system,” said Attorney General Martha Coakley. “In a time when health care costs are skyrocketing nationwide, we are committed to aggressively ensuring that taxpayer dollars are protected.” While it agreed to the settlement, Dey denied wrongdoing and said its price reporting was consistent with legal standards. In a statement, Dey said that when “virtually an entire industry is sued” by state attorneys general around the country, the real issue is with the government’s reimbursement system. “Dey has settled this litigation with the Commonwealth of Massachusetts as a pragmatic solution to avoid any further costs of continuing litigation and the vagaries inherent in it,” said Dey’s senior vice president of legal affairs John Kling. The Medicaid Fraud Control Unit of the Massachusetts Attorney General’s office worked on the investigation with federal and other state’s law enforcement authorities.

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