Indianapolis-based drug manufacturer Eli Lilly & Co. is one of several companies being investigated for the way it prices its drugs.
Manufacturers Merck & Co. and Valeant Pharmaceuticals International Inc. are also under investigation.
The Wall Street Journal reports much of the investigation revolves around how drug manufacturers are pricing drugs in regards to Medicaid and Medicare rebate programs.
The Justice Department has probed whether other drug makers have properly reported pricing information to Medicaid programs, which are jointly funded by states and the federal government. Under federal law, drug makers must provide price discounts to Medicaid programs to help them control costs. For most drugs, manufacturers are supposed to pay rebates of 17.1% to 23.1% of the average price or the difference between the average price and the best price offered to private customers, whichever is greater.
The U.S. Department of Justice and the U.S. Attorney's Office in Pennsylvania are leading the investigation, and Lilly noted it was part of the investigation in its Oct. 30 SEC filing.
Reuters reports Lilly says it is responding to the federal agencies.