County accepts settlement

JOHNSTOWN – The Fulton County Board of Supervisors recently accepted a nearly $30,000 settlement in a longstanding county lawsuit involving Medicaid overcharges from pharmaceutical companies.

The board accepted the final $29,139 settlement – in a joint case with other counties from nine years ago – at its meeting last week at the County Office Building.

County Treasurer Terry Blodgett also was authorized to sign forms with the state to obtain reimbursement for administrative costs associated with settlements.

Legal action had alleged drug companies fraudulently reported inflated Average Wholesale Prices for their drugs, which form the basis for Medicaid payments. That alleged conduct resulted in millions of overcharges to the county’s Medicaid budget.

Supervisors in 2004 authorized legal services with Kirby, Melnerney & Squire to conduct a joint lawsuit with the New York State Association of Counties and other counties to recover Medicaid overcharges from pharmaceutical companies.

More than 40 states and the federal government were involved in the lawsuit that was settled for $389 million, which alleged pharmaceutical company Bristol-Myers Squibb illegally marketed its drugs. Other drug companies also were involved in the litigation.

New York state announced in July 2008 it was receiving more than $40 million from settlements distributed among the state and 49 counties participating in the lawsuit at that time. Counties in the state annually finance more than $7 billion for health care services provided through the Medicaid program. Between 1997 and 2003, counties paid more than $13 billion for prescription drugs purchased through the Medicaid program.

Past allegations included:

Reporting inflated prices for various prescription drugs knowing that Medicaid and various federal health care programs would use these reported prices to pay for products used by their recipients.

Paying illegal kickbacks to physicians, health care providers and pharmacists to induce them to purchase products.

Promoting the sale and use of Abilify, an antipsychotic drug, for pediatric use and for treatment of dementia-related psychosis, uses which the Federal Food and Drug Administration has not approved.

Michael Anich covers Johnstown and Fulton County news. He can be reached at