Four Pharmaceutical Companies Agree To Pay $124 Million To Settle Medicaid Rebate Fraud Claims

On October 19, 2009, the U.S. Department of Justice announced that Mylan Pharmaceuticals, UDL Laboratories, AstraZeneca Pharmaceuticals, and Ortho McNeil Pharmaceutical agreed to pay a combined $124 million to settle a civil lawsuit under the False Claims Act alleging that the companies engaged in fraud in connection with Medicaid rebates.  According to the lawsuit, the defendants sold “innovator drugs” manufactured by other companies and classified those drugs as “non-innovator drugs” for Medicaid rebate purposes.  Under the Medicaid Prescription Drug Rebate Program, rebates required to be paid to Medicaid by drug companies for innovator drugs are higher than rebates for non-innovator drugs.  The fraud was brought to the attention of the Government through a qui tam action filed by Ven-A-Care, a corporation located in Key West, Florida.  The whistleblower received a total of $10,787,392 as its share of the Government’s recovery.  For more information, you can read the press release from the Department of Justice.

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