BOISE, Idaho (Legal Newsline) - Idaho Attorney General Lawrence Wasden announced a settlement on Monday with Mylan Pharmaceuticals Inc. and Mylan Laboratories Inc. that resolves the state's claims related to average wholesale prices reported by the companies.

Mylan will pay $625,000 to reimburse Idaho taxpayers for the state's share of allegedly excessive prices Idaho Medicaid paid for prescription drugs due to inflated average wholesale price reporting. More than $460,000 will be deposited in the state's General Fund to be appropriated by the Idaho legislature. A total of $50,000 of the settlement recovery will go to the consumer protection account to reimburse Wasden's office.

"This settlement addresses the harm incurred by Idaho's taxpayers and the state," Wasden said. "It should stop the reporting of false and misleading drug prices and provide the state significant financial relief. This settlement is good for Idaho because it successfully resolves this dispute without the need for further, costly litigation."

Idaho Medicaid provides healthcare services, such as prescription drugs, to low-income residents. Idaho Medicaid must reimburse pharmacies at the drug's estimated acquisition cost. It primarily uses the average wholesale price the drug manufacturers report to determine the amount. If a manufacturer reports a false or inflated average wholesale price, taxpayers may pay too much for the drug through reimbursements by Medicaid.

In 2003, one unit of Mylan's pharmaceutical product Bumetanide, a generic version of Bumex, had a published average wholesale price of $0.752. Wasden alleged that the actual average wholesale price was $0.191 in 2003, resulting in a 293 percent difference between the published and actual price.

"The publishing of false drug prices harms taxpayers and the state," Wasden said. "My office has investigated and litigated this matter and what we uncovered is that in a very large number of instances, drug manufacturers reported false and inflated prices for their drugs."

The settlement between the state and Mylan was approved by the Fourth District Court in Ada County. Mylan admitted no wrongdoing or liability as part of the settlement.

Wasden has resolved 13 matters related to average wholesale pricing with drug manufacturers. These agreements have resulted in more than $17.2 million recovered for the state. Three cases related to average wholesale pricing that name nine other drug manufacturers are still pending.