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Schering-Plough to pay $346 million to settle criminal, civil charges

Compliance Monitor, August 4, 2004

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Schering-Plough Corp. agreed to pay $346 million in fines and damages to settle charges that it overcharged for drugs sold through Medicaid.

According to the U.S. attorney general in Philadelphia, who prosecuted the case, the drug company pleaded guilty to criminal charges and will pay a $52.5 million fine. It also agreed to pay more than $290 million to resolve its civil liabilities in connection with its illegal and fraudulent pricing of Claritin, its best-selling drug.

According to a press release from the attorney general, the criminal charge stemmed from a $1.8 million kickback Schering-Plough offered to an HMO that threatened to drop Claritin because it was too expensive.

The company, based in Kenilworth, NJ, allegedly offered the HMO kickbacks by paying a false "data fee" of 2% of the annual gross sales of Schering drugs.

Federal prosecutors in Philadelphia began investigating the allegations in 1999 as part of an inquiry into pharmaceutical marketing practices.

Resources:

To read the release from the U.S. attorney general in Philadelphia, click here.

To read Schering-Plough's corporate integrity agreement, click here.

Medicare Reform Advisor, HCPro's weekly newsletter for drug companies and providers, covers the impact of the upcoming average sales price system and other changes. Check it out by clicking here.

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