Florida sues generic drug makers for overcharging

Florida's attorney general on Wednesday sued Novartis AG unit Sandoz Inc.; Ivax Pharmaceuticals, a subsidiary of Ivax Corp. ; and Alpharma Inc. unit PurePac Pharmaceuticals for overcharging the state's Medicaid health care program.

Attorney General Charlie Crist said in a statement the lawsuit sought up to $75 million in damages and penalties for defrauding the state by inflating the prices of generic drugs provided to Medicaid patients.

"These companies engaged in a knowing scheme to rip off Florida's Medicaid program, which means they were cheating the public," Crist said.

Florida has joined more than a dozen other U.S. states in investigating the pricing practices of drug makers, as states grapple with double-digit health care inflation.

Crist sued under Florida's False Claims Act and common law fraud legislation, alleging the companies began in 1994 to overstate the prices of generic medications for treating depression, schizophrenia, seizures, angina and other serious ailments.

The aim was to create higher reimbursements from Medicaid than were justified and cost Florida taxpayers $25 million, he said. The false claims act authorizes triple damages, meaning the state could recover up to $75 million.

It was the second time Florida has taken legal action against pharmaceutical companies for overcharging.

In July 2003, Crist sued Dey Inc., Schering-Plough Corp. subsidiary Warrick Pharmaceuticals Corp. and Roxane Laboratories Inc. in a case that is still ongoing.