Lilly, Merck get inquiries from Department of Justice over drug pricing

Drug manufacturers Eli Lilly and Merck & Co. have received requests from the U.S. Department of Justice for information concerning drug pricing, according to the Wall Street Journal. The United States Attorney’s Office in Philadelphia are conducting an inquiry of Eli Lilly’s treatment of certain distribution service agreements with wholesalers when calculating and reporting average manufacturer prices for the drug related program for Medicaid. The information came from a report filed by Lilly with the S.E.C.

The rebates from Medicaid, the government health insurance for low-income citizens are based on the average price the wholesalers pay to manufacturers for drugs.

Another drug maker Valeant Pharmaceuticals said last month that it had received a letter from the Justice Department saying it was investigating potential violations of the False Claims Act concerning Biovail Pharmaceutical’s treatment of certain service agreements with wholesalers when calculating drug prices for the Medicaid program. Valeant acquired Biovail in 2010.