Four pharma companies settle Medicaid allegations in New Hampshire

by bvernia | October 20th, 2009

The US Attorney’s office in New Hampshire announced yesterday the settlement of a qui tam alleging that four pharmaceutical companies – Mylan Pharmaceuticals, UDL Laboratories, Aztra-Zeneca Pharmaceuticals, and Ortho-McNeill – mischaracterized their prescription drugs to state Medicaid programs.

As DOJ’s press release explains:

The Medicaid Prescription Drug Rebate Program was enacted by Congress in 1990 out of concern for the costs the 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.

Each company’s share of the $124 million total was as follows:

  • Mylan and UDL : $118 million
  • Astra-Zeneca : $2.6 million
  • Orth-McNeil : $3.4 million

Über-relator Ven-A-Care, of Key West, Florida, will receive a share amounting to nearly $11 million.

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