Lilly, other drugmakers face federal pricing probe

November 8, 2015

Indianapolis-based Eli Lilly and Co. and other U.S. drugmakers are being investigated by federal prosecutors over their drug-pricing practices related to Medicare and Medicaid, The Wall Street Journal and Reuters reported Friday.

Lilly, Merck & Co., Valeant Pharmaceuticals International and Turing Pharmaceuticals are being questioned, the newspapers said. The extent of the investigation and its exact nature are unknown, the newspapers said.

Lilly quietly acknowledged the probe in a single paragraph of a lengthy Oct. 30 quarterly regulatory filing.

"In September 2015, we were advised that the U.S. Attorney’s office for the Eastern District of Pennsylvania and the Civil Division of the U.S. Department of Justice are conducting an inquiry concerning our treatment of certain distribution service agreements with wholesalers when calculating and reporting Average Manufacturer Prices in connection with the Medicaid drug rebate program. We are voluntarily responding to this request," the filing said.

Lilly spokesman Mark Taylor told Reuters that the company is cooperating with the investigations. He said drugmakers are required every three months to provide the U.S. Centers for Medicare and Medicaid Services the average prices its wholesalers pay for their products.

"This inquiry is not in regard to our list prices, or how we price our medicines in general," Taylor told Reuters.

Kenilworth, New Jersey-based Merck said it received questions regarding pricing of Dulera, its asthma inhaler product.

Drugmaker prices have come under criticism from Democratic presidential front-runner Hillary Clinton during her campaign, prompting Lilly CEO John Lechleiter to publicly defend them in late October.

Lilly shares fell 15 cents Friday, to $80.46 each.


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