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Best Price Pharmaceutical Fraud Attorneys

Pharmaceutical manufacturers participating in Medicaid programs must rebate to the states, a certain statutorily prescribed portion of the price of drugs purchased by each Medicaid program in each state.

Nolan Auerbach & White are experienced Pharmaceutical Fraud Lawyers helping courageous whistleblowers.

Manufacturers do this because the Medicaid statute permits the federal Government to partially reimburse states only for drugs purchased from manufacturers who have agreed to pay statutorily specified rebates to those states. Thus, pharmaceutical manufacturers that want their drugs available to Medicaid beneficiaries under the Medicaid program enter into a Rebate Agreement with the HHS Secretary to provide rebates.

The Rebate Agreement requires manufacturers to submit a Quarterly Report (Form CMS-367). The Quarterly Report includes information regarding each of the manufacturers’ “Covered” Drugs, including such information as its “Average Manufacturer Price” (“AMP”), “Baseline AMP,” and its “Best Price.” Based upon this information, CMS then tells the states how much rebate the state is entitled to collect with respect to each drug.

For “single source drugs” and “innovator multiple source drugs,” manufacturers are required to rebate 15.1%, or the difference between AMP and the Best Price at which the manufacturer sells the product to a non-public health service or Veteran s administration customer, whichever is greater.

Pharmaceutical manufacturers enter into a Rebate Agreements with the U.S. Secretary of Health and Human Services. In that Agreement, they agree to comply with 42 U.S.C. § 1396r-8, and hence:

a. Agree to report their Best Price, inclusive of cash discounts, free goods contingent upon any purchase requirements, volume discounts and rebates, etc

b. Agree that they would determine its Best Price based upon its AMP, calculated as “net sales divided by numbers of units sold, excluding free goods (i.e., drugs or any other items given away, but not contingent on any purchase requirements)” and that they would include that in the calculation, cash discounts and all other price reductions “which reduce the actual price paid”; and

c. Agree that the Best Price would not take into account nominal prices, defined as prices that are less than 10 percent of the AMP in that quarter, so long as the sale of product at a nominal price was not contingent on any other sale.

After execution of this Agreement, the pharmaceutical manufacturers report their AMP and Best Price in each quarter, to the Medicaid Program on Form CMS-367.

Potential whistleblowers who can confirm any of the following may have sufficient knowledge about a Best Price, Pharmaceutical Fraud, False Claims Act Violation:

a. Did the manufacturer pay Managed Care Organizations (“MCOs”), or specialty pharmacies (SPs) or Prescription Benefit Managers (PBMs) or other entity kickbacks, to have a drug product listed on the MCO’s formulary, or otherwise give preferential treatment to the drug product to increase utilization?

b. Did the manufacturer enter into arrangements with these or other entities for educational and/or research grants? (Ostensible reasons for the grants can include educating the MCO’s participating providers and/or enrollees regarding medication compliance, chronic disease management, appropriate prescribing of pharmaceutical products, preventative health care measures, conducting outcome studies and more).

c. Were discounts and/or rebates provided but were off-invoice? Were they hidden from the transaction? Were they disguised as educational grants or some other phony purpose?

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.


Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.


Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.


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