DOJ: News Release

Funds from Pharmaceutical Settlement Passed Along to Community Clinics

HELENA – Community health care clinics around the state are getting an early holiday gift this week, thanks to the settlement of a drug-pricing complaint the Montana Attorney General’s Office filed more than five years ago.

In a press conference at the Cooperative Health Center in Helena, Montana Attorney General Mike McGrath and Department of Public Health and Human Services Director Joan Miles announced that 14 health centers around the state will receive $198,000 as part of a settlement between the state and the pharmaceutical company Dey, Inc. McGrath and Miles were joined by Cooperative Health Center Executive Director Kate McIvor and Helena Indian Alliance Director Nicholas Vrooman.

“Montana taxpayers have been cheated out of millions of dollars, and some of the most vulnerable consumers have been hardest hit by the deception,” McGrath said. “Facilities like the Cooperative Health Center and others around the state can put these settlement funds to good use right away.”

The case dates back to 2002, when McGrath’s office sued Dey and a number of other pharmaceutical companies, charging that the companies inflated the so-called “average wholesale price” or AWP. Reimbursements from Medicare, Medicaid and from some consumers are based on the AWP, a price that is reported to industry publications by pharmaceutical companies.

While federal regulations require companies to report the best or lowest price, many times the reported AWP is vastly higher than the actual price charged to physicians and suppliers. The spread between the amounts becomes a financial windfall.

Dey manufactures drugs such as Albuterol used to treat asthma and other lung diseases, the pain reliever hydrocodone, and the sodium chloride solution used in nebulizers.

The amounts of the payments to the 14 “federally qualified health centers” were based on the number of Medicaid patients each clinic had served in the past year. The facilities may use the settlement money, however, for any patient services.

“Providing these funds to these facilities is a great investment,” Miles said. “These centers help hundreds of Montana families who may not have access to health care or insurance.”

Facilities receiving funds are:

CLINIC NAME Payment
Ashland Community Health Center, Ashland $2,904.95
Deering Clinic, Billings $57,298.80
Indian Health Board of Billings, Billings $9.09
Community Health Center, Butte $44,378.84
Sweet Medical Center, Chinook $1,850.25
Glacier Community Health Center, Cut Bank $7,641.96
Community Health Care Center, Great Falls $13,651.88
Cooperative Health Center, Helena $12,947.24
Helena Indian Alliance, Helena $1,063.78
Lincoln County Community Health Center, Libby $11,915.28
Community Health Partners, Livingston $15,397.58
Custer County Community Health Center, Miles City $1,577.49
Partnership Health Center, Inc., Missoula $20,866.51
Marias Healthcare Services, Shelby $6,496.35
Total $198,000.00

Dey and the state reached the settlement in March of this year, and the funds were sent to the health care centers this month.

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