Corporate Compliance

Pharmaceutical manufacturers to pay $421.2 million to settle False Claims Act cases

Compliance Monitor, December 15, 2010

Abbott Laboratories Inc., B. Braun Medical Inc., Roxane Laboratories Inc., and affiliated entities agreed to pay $421.2 million to settle allegations they violated the False Claims Act, according to a Department of Justice (DOJ) press release.

The companies allegedly reported false and inflated prices for pharmaceutical products to federal healthcare programs, which the programs use to set payment rates. The DOJ alleged that Abbott, Roxane, and Braun inflated prices to increase reimbursement for those prescribing their products, as a way to market, promote, and sell their drugs. The defendants caused providers to submit false claims to federal healthcare programs, resulting in millions of dollars of overpayments, according to the DOJ.

Roxane will pay $280 million to resolve claims that it and related entities reported false prices for the following drugs:  Azathioprine, Diclofenac Sodium, Furosemide, Hydromorphone, Ipratropium Bromide, Oramorph SR, Roxanol, Roxicodone and Sodium Polystyrene Sulfonate.

Abbott will pay $126.5 million to resolve two qui tam cases. In the first, Abbott allegedly violated the False Claims Act by inflating prices for dextrose solutions, sodium chloride solutions, sterile water and vancomycin. The second whistleblower case alleged that Abbott inappropriately priced the drug erythromycin, an oral antibiotic.

B. Braun Medical Inc. agreed to pay $14.7 million to resolve allegations that it caused the Medicaid program to pay inflated prices for 49 of its drug products, including dextrose solutions, sodium chloride solutions, sterile water, lactated ringers solution, and a variety of other intravenously administered drugs. 

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