Statement from Dey, L.P. Regarding Pricing Litigation by the U.S. Department of Justice.

NAPA, Calif., Sept. 11 /PRNewswire/ -- Dey, L.P. unequivocally denies any wrongdoing in the pricing or marketing of its generic or branded pharmaceutical products. In response to claims filed by the Department of Justice (DOJ), DEY maintains that it has consistently participated legally and ethically within national and state reimbursement systems. DEY intends to defend itself vigorously against the DOJ's claims.

"When virtually an entire industry is sued -- as has been the case with the pricing lawsuits that have been filed around the country by dozens of attorneys general -- it indicates that the real issue is not the industry's conduct, but rather the government's own reimbursement system," said John M. Kling, Senior Vice President, Legal, at Dey, L.P. "DOJ's claims against DEY derive from a government reimbursement model that relied on published Average Wholesale Prices (AWP). For more than three decades, the Federal and State governments have known about the AWP-based reimbursement model, understood its limitations, and accepted its use as a way to gain the voluntary participation of pharmacists and other healthcare providers in the public healthcare entitlement program Medicaid. The 'spread' between dispensers' acquisition costs and Medicaid reimbursements provided the mechanism whereby pharmacists and other healthcare professionals could recapture their actual dispensing costs.

"The problems with the AWP-based reimbursement model are a primary reason why Congress and the Administration reformed the pricing system under the Medicare Modernization Act of 2003. ...