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First Sue, First Serve

In today�s Cincinnati Enquirer, James McNair offers an excellent description of one company�s journey through the fifty-state settement process. Omnicare Inc., a pharmaceutical supplier from Kentucky, has been hit with Medicaid billing practice investigations by Maine, Michigan, New York, and Ohio�-as well as the the U.S Attorneys office.

Thus far, Omnicare has settled with Maine and New York. Omnicare has also set aside about $54M for the federal suit (though no settlement has been made). And we can only assume that more states will follow.

Between the lines of the article, one unstated premise becomes clear: the uncertain and circuitous AG-by-AG remedial process brings a terrible social cost�-a cost that we�d be smart to reevaluate, even if every company accused of Medicaid fraud were slamdunk guilty. The intergovernmental structure of Medicaid may necessitate a burdensome administrative regime (which raises some good questions for another day), but that is no justification for a counterproductive litigulatory scheme by which �first sue, first serve� becomes the gameplan for our national healthcare and pharmaceutical activities.

If our fifty-one governments want to be in the business of pill price-fixing, at the very least they should find a more efficient way of fixing the prices than by redirecting money through piecemeal assaults by state attorneys general.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.