Four Pharmaceutical Companies Pay $124 Million for Submission of False Claims
to Medicaid
WASHINGTON, Oct. 19 /PRNewswire-USNewswire/ -- Mylan Pharmaceuticals, UDL
Laboratories, AstraZeneca Pharmaceuticals and Ortho McNeil Pharmaceutical have
entered into settlement agreements for a total of $124 million to resolve
claims that they violated the False Claims Act by failing to pay appropriate
rebates to state Medicaid programs for drugs paid for by those programs, the
Justice Department announced today.
The Medicaid Prescription Drug Rebate Program was enacted by Congress in 1990
out of concern for the costs that Medicaid was paying for outpatient drugs. By
agreeing to participate in the Medicaid Rebate Program and signing these
rebate agreements, the four companies agreed to pay quarterly rebates to
Medicaid that were based upon the amount of money that health care program
paid for each company's drugs. The precise amount of a rebate is determined
in part by whether a drug is considered an "innovator" drug or a
"non-innovator" drug. The rebate that must be paid for innovator drugs is
higher than the rebate for non-innovator drugs.
Each of the companies agreed to pay a settlement to resolve allegations that
it had sold innovator drugs that were manufactured by other companies and had
classified those drugs as non-innovator drugs for Medicaid rebate purposes.
As a result of the improper classification of these drugs, the companies
underpaid their rebate obligations under the Medicaid Rebate Program.
Mylan and UDL agreed to pay $118 million to resolve allegations that they
underpaid their rebate obligations with respect to several Mylan drugs
(nifedipine extended release tablets, flecainide acetate, selegiline HCL,
Orphenadrine Citrate Aspirin and Caffeine tablets,
Triamterene/Hydrochlorothiazide, Propoxyphene HCL, Propoxyphene
HCL/Aspirin/Caffeine, Prophyxphene Napsylate/Acetaminophen, Ibuprofen tablets,
Bumetanide, Cephalexin and Cefactor) and several UDL drugs (nifedipine
extended release tablets, selegiline HCL, Triamterene & HCTZ, Propox Naps &
APAP, Flecainide Acetate, Trihexyphenidyl, Ranitidine HCL syrup, Sucralfate
Suspension, Selegiline HCL and Bumetanide). Because the Medicaid program is
funded by both the federal and state governments, the federal government
received $60,896,476.00, the states $49,824,389.00 of the settlement amount,
and $7,279,135.00 will be paid to entities that participated in the Public
Health Service's Drug Pricing Program.
Separately, AstraZeneca paid $2.6 million ($1.43 million to the federal
government and $1.17 million to the states) to resolve allegations that it
underpaid its rebate obligations with respect to Albuterol. Ortho McNeil paid
$3.4 million ($1.87 million to the federal government and $1.53 million to the
states) to resolve allegations that it underpaid its rebate obligations with
respect to Dermatop.
"The Civil Division will continue to work with our state partners to ensure
that Medicaid programs, which provide health care to more than 58 million
Americans, receives the same discounts that any larger insurer gets," Tony
West, Assistant Attorney General for the Civil Division, said. "These cases
exemplify the strong cooperation between the Department of Justice and the
states in protecting American taxpayers."
This case was brought under the False Claims Act, which allows for private
persons to file suits on behalf of the government. The whistleblower,
Ven-A-Care, a corporation located in Key West, Fla. will receive a total of
$10,787,392 as its share of today's recovery.
"These settlements are the culmination of several years of hard work on the
part of the government's investigators and attorneys," said John P. Kacavas,
U.S. Attorney for the District of New Hampshire. "The settlement with Mylan
and UDL is the largest health care fraud recovery that the U.S. Attorney's
Office in New Hampshire has ever obtained. The settlements show that the
government is committed to identifying health care fraud and ensuring that
companies that benefit from doing business with the government agree to play
by the rules."
This case was handled by the U.S. Attorney's Office for the District of New
Hampshire and the Commercial Litigation Branch of the Justice Department's
Civil Division with assistance from the Medicaid Fraud section within the New
Hampshire Attorney General's Office, as well as the National Association of
Medicaid Fraud Control Units. The case was investigated by members of the
Office of Investigations of the Office of Inspector General of the U.S.
Department of Health and Human Services.
SOURCE U.S. Department of Justice
U.S. Department of Justice Office of Public Affairs, +1-202-514-2007,
+1-202-514-1888 (TDD)
