Prescription Drug Manufacturer Settles Charges It Inflated Drug Prices

As part of a recent settlement agreement, Par Pharmaceutical Cos. will pay $1.7 million to resolve the state of Idaho's charges that the company inflated their numbers -- once by more than 3,000 percent -- when reporting the wholesale prices of its drugs to the state.

The issue is a critical one because it involves a state government program, Idaho Medicaid, which provides health-care services, including prescription drugs, to low-income residents. Under state law, Idaho Medicaid is required to reimburse pharmacies at the "estimated acquisition cost" of the drug. Idaho Medicaid uses the "average wholesale price," as reported by drug manufacturers, to determine this amount, Idaho Attorney General Lawrence Wasden said in a statement.