[Ip-health] News: Pfizer subpoenaed by GAO for drug price data

[Kate Krauss]

Pfizer Confirms It Received a Subpoena From the GAO Seeking Drug-Price Data

By Scott Hensley and Chris Adams
Staff Reporters of The Wall Street Journal
 
01/09/2002 
The Wall Street Journal

B10 

Pfizer Inc. confirmed reports that it received a subpoena from the General
Accounting Office, saying that it had declined to voluntarily provide
sensitive information on drug prices to investigators because it was worried
about the confidentiality of its data.

The subpoena issued last week by the GAO named the New York-based drug maker
and its chief executive officer, Henry McKinnell, and requires a response by
Jan. 14. The company had failed to respond to the voluntary request from the
GAO, the investigative arm of Congress. Ten other drug makers complied with
the GAO query, part of a continuing investigation into the prices that
Medicaid pays for prescription drugs.
 
Pfizer General Counsel Jeffrey Kindler said in a written statement that the
company has "no interest in an adversarial relationship with the GAO" but
that "this information has the potential to compromise competitive positions
in the marketplace." Pfizer said the government rejected several proposals
to safeguard the data's confidentiality.

The GAO is seeking detailed sales transaction data that would allow it to
see if pricing information Pfizer sends the federal government is accurate.
To participate in the Medicaid program, drug makers must submit pricing
data, telling the government both the "best price" they charge any customer
and the "average manufacturer price" for any prescription drug sold to state
Medicaid recipients. Under a complicated drug-rebate system, those figures
are used to help determine the eventual price paid by Medicaid for
prescription drugs.

To see if the prices reported by companies are accurate, the GAO is seeking
sales transaction information for specific high-volume drugs.

Pfizer said in a written statement that it has been willing to share the
pricing information since July 2001, when the company was first contacted by
the GAO. But Pfizer has worried that data provided directly to the GAO could
be released publicly.

Subpoenas from the GAO are unusual, and have been used infrequently by the
investigative agency, according to a person familiar with the investigation.
The Medicaid drug-rebate law allows the federal government to request those
data. 

The GAO tried to resolve Pfizer's concerns but the company still refused to
voluntarily hand over the information, resulting in the subpoena, the person
said.