Delaware AG probes pharma-hospital pricing contracts
Pharma Compliance Alert, May 2, 2007
Delaware Attorney General Beau Biden is quietly investigating several pharmaceutical companies' contracts with the state's hospitals and healthcare providers.
GlaxoSmithKline revealed in a Securities and Exchange Commission (SEC) filing last week that it received two subpoenas from the state AG's office in March. According to the filing, the subpoenas seek documents relating to nominal pricing contracts with hospitals and other providers located in Delaware. GSK also said that "other pharmaceutical companies have received similar subpoenas."
According to The News Journal in Delaware, those other companies are Pfizer and AstraZeneca. The paper reported that Biden's office sent subpoenas to the companies that relate to pricing contracts with hospitals.
Nominal pricing is selling drugs at discounts of 90% or more. Although companies are required to give the lowest price to Medicaid, there is an exception for selling discounted drugs to charitable institutions. The practice has been under fire recently because companies have been accused of offering discounts to hospitals in exchange for bulk purchases.
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