Corporate Compliance

Four pharmaceuticals to pay $124 million for submission of false claims to Medicaid

Compliance Monitor, October 21, 2009

AstraZeneca, Mylan Pharmaceuticals, Ortho McNeil Pharmaceutical, and UDL Laboratories, have agreed to pay settlements totaling $124 million to resolve claims that the companies failed to appropriately reimburse state Medicaid programs for drug purchases, according to a Department of Justice (DOJ) press release.
The four companies failed to comply with The Medicaid Prescription Drug Rebate Program, which states that companies must pay rebates to Medicaid on the basis of whether a drug is an “innovator” drug or a “non-innovator” drug. An innovator drug’s price is much higher than the rebate for non-innovator drugs.  
According to the DOJ, each company paid a settlement resolving allegations that it had sold innovator drugs manufactured by other companies, and classified those drugs as non-innovator drugs for Medicaid rebate purposes. Through the improper classification of these drugs, the companies underpaid their rebate obligations to the Medicaid Rebate Program.
The whistleblower, Ven-A-Care Corporation, will receive over $10.7 million as its share of the recovery.

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