Whistleblowing Louisiana internist William St. John LaCorte, M.D., says he will continue his qui tam lawsuit against Merck & Co. even though he faces long odds now that the Department of Justice has bowed out.
Federal law requires drugmakers to sell drugs to Medicaid at the lowest prices they offer, with an exception for charitable or research transactions at prices of a nominal amount, or less than 10% of average manufacturer price.
LaCorte's suit alleges Merck induced hospitals to start patients on its ulcer and heartburn medication, Pepcid, by selling it to hospitals for 10 cents a pill, then later overcharged Medicaid with a price of $1.65 a pill.
"It is worrisome at a time when most states are being crushed under the high cost of Medicaid, specifically drugs," LaCorte says.
LaCorte filed his suit under the False Claims Act in 1999 in the U.S. District Court in New Orleans, but it remained sealed as the DOJ investigated. It was unsealed Jan. 21 when the DOJ told the court that, although the government will continue its investigation, it "is not intervening at this time."
LaCorte says he's waiting for Merck to file its response, due in April.
A Merck representative says the company will contest the lawsuit.
"The discounted prices provided to customers in New Orleans complied fully with the law," says Merck spokesperson Christopher Loder, noting Merck's discount agreement excludes nominal prices from the calculation of Medicaid's best price.