Healthy Skepticism Library item: 851

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Reuters .
Glaxo: Justice Dept Probes Drug Pricing
REUTERS 2005 Mar 9

Full text:

GlaxoSmithKline Plc (GSK.L), Europe’s biggest drugmaker, said the U.S. Department of Justice was investigating whether certain of its pricing policies violated Medicaid rules.

The company, which disclosed the probe in a filing with the Securities and Exchange Commission late on Tuesday, said it was cooperating in the investigation by government attorneys.

GSK said it had provided documents and information about so-called nominal pricing arrangements for a number of products.

The attorneys involved in the case are the same ones that are investigating whether a number of companies, including GSK, inflated average wholesale prices of drugs, which are used to determine how much Medicaid pays for products.

Under regulations governing Medicaid — the U.S. government’s health plan for the poor — drugmakers are required to report the lowest price of a medicine.

The Department of Justice is now studying whether some of GSK’s nominal pricing arrangements may have violated civil statutes or laws.

Glaxo shares were trading 0.6 percent higher at 1,277 pence at 4:55 a.m. EST.