WASHINGTON — The Medicaid health-insurance program for low-income and disabled people is overpaying for prescription drugs by hundreds of millions or even billions of dollars a year, according to three inspector-general reports to be released today.

Government pricing formulas intended to keep prescription costs in check have had just the opposite effect, the reports found, resulting in payments that far exceed the market prices for thousands of prescriptions. Even when the government used generic drugs, it paid far more for them than it had to. Just eliminating overpayment for generics could save up to $1.2 billion a year, one of the reports estimated.

The full amount of Medicaid waste is unknowable, congressional staffers said, because federal oversight of the program has been lax. Prescription drugs account for about 14 percent of the estimated $329 billion in annual Medicaid spending, or well over $30 billion.

Home-sale probe

for congressman

A federal grand jury has subpoenaed documents from a California congressman related to the sale of the lawmaker's home to a defense contractor who put it back on the market and sold it at a big loss.

The subpoena issued to Republican Rep. Randy "Duke" Cunningham was disclosed by his attorney, K. Lee Blalack, in a brief statement that did not specify what documents were being sought. Blalack said Cunningham directed him to comply with the subpoena. The U.S. Attorney's office in San Diego declined to comment.

Cunningham sold his home in 2003 to Mitchell Wade, a friend and campaign contributor, for $1.7 million. Wade took a $700,000 loss when he resold it less than a year later. During that time, home prices in San Diego County rose an average of nearly 25 percent.

Meanwhile, Wade's company, MZM Inc., was increasing its federal contracting business. In 2004, MZM tripled its revenue and nearly quadrupled its staff, according to the company's Web site. Cunningham sits on two panels that oversee the kind of classified intelligence work MZM does for the military.

Tobacco companies

to pay $14 billion

The government asked a federal judge to impose $14 billion in penalties against Big Tobacco in a racketeering lawsuit, ignoring critics who questioned why prosecutors backed off stiffer punishments.

The Justice Department's request, filed shortly before midnight Monday, fleshed out proposals that prosecutors put forward during the trial's closing arguments earlier this month.

The government asked for companies to pay for a $10 billion, five-year smoking cessation program and a $4 billion, 10-year education campaign to counter tobacco marketing. Prosecutors also asked for cigarette makers to reduce youth-smoking levels by 42 percent by 2013, or pay stiff fines.

The case came under fire from Democratic lawmakers and anti-smoking advocates this month when prosecutors slashed the size of a $130 billion stop-smoking plan proposed by one of their own witnesses. At lawmakers' request, a Justice Department official agreed to investigate whether the prosecutors were inappropriately pressured to downsize the plan.