HEALTH CARE

CALIFORNIA SUES SCORES OF DRUG COMPANIES

California accused Glaxo-SmithKline PLC, Abbott Laboratories, and 37 other pharmaceutical companies of defrauding the state’s $34 billion Medi-Cal health program for the poor by inflating prescription drug prices. California Attorney General Bill Lockyer said in a lawsuit filed yesterday in federal court in Boston that the companies supplied inflated prices to industry publications used by Medi-Cal to reimburse health care providers for drug costs. The companies profited from the difference between the actual cost of the drugs and the reimbursement rates, costing the state potentially hundreds of millions of dollars, Mr. Lockyer said.

– Bloomberg News

HEALTH-SOUTH EX-CFO SENTENCED

Aaron Beam, who co-founded Health-South with Richard Scrushy, was sentenced to three months in prison for his part in a $2.7 billion accounting fraud at the company.

Beam, 61, will pay $275,000 he made from the fraud and a $10,000 fine and will be on probation for one year following his release. Prosecutors had sought leniency for Beam, who could have received as much as 30 years, because he was one of five chief financial officers who testified against Mr. Scrushy.

– Bloomberg News

AIRLINES

UNITED RECEIVES FOUR PROPOSALS TO HELP IT EXIT BANKRUPTCY

United Airlines parent UAL Corporation, the second-largest American carrier, has received four proposals from banks willing to provide $3 billion in financing to help the company exit bankruptcy. Chief Executive Officer Glenn Tilton told employees in a message today that the offers include “fully underwritten commitments that meet our aggressive timetable for exit.” The Chicago-based company expects to exit the Chapter 11 bankruptcy process by early next year, three years after seeking protection from creditors in December 2002.

– Bloomberg News

IN BRIEF

Eastman Kodak will cut about 1,000 jobs in America and China as the decline in film sales accelerates … General Motors added 2006 models to its offer of employee discounts for all customers and extended the program through September, a sign the company has been unable to wean itself from price cuts … General Electric agreed to pay $1.56 billion for a stake in Turkiye Garanti Bankasi AS, the third biggest publicly traded lender in Turkey, where consumer borrowing almost doubled in the past year … Citigroup may sell Legg Mason’s capital-markets unit to Stifel Financial. The company also said Marjorie Magner sold 100,000 shares, a quarter of her holdings, a day after she resigned, for $4.35 million … A former Lehman Brothers broker pleaded guilty to charges that she funneled about $11 million in drug proceeds for a former Mexican governor …The number of Americans filing first-time claims for jobless benefits fell to 315,000 last week as companies held on to workers in an expanding economy … Johnson & Johnson won E.U. approval for its $25.4 billion purchase of Guidant … Shares of TiVo fell as much as 12% after its new chief executive warned of “real challenges” ahead … Vonage, the biggest provider of Internet-based telephone service, is planning to go public.

– Bloomberg News, Dow Jones Newswires, and Associated Press