Pharmaceutical Manufacturer Dey Inc. To Pay $280 Million To Settle False Claims Act Case Alleging That The Company Falsely Reported Inflated Drug Prices

On December 20, 2010, the U.S. Department of Justice announced that it had entered into a settlement agreement with the pharmaceutical manufacturer Dey, Inc. and its subsidiaries to resolve allegations in a lawsuit brought under the False Claims Act that the company falsely reported inflated drug prices to federal health care programs, which caused the Government to pay more than it otherwise would have paid for the medication had Dey reported the prices truthfully.  The Government relies on pharmaceutical manufacturers such as Dey to accurately report the price health care providers are paying for drugs in order to compute Medicare and Medicaid reimbursement rates.  By falsely inflating these prices, health care providers received unlawful profits in the form of the “spread” between what they actually paid for the drug and the artificially inflated reimbursement rate paid by Medicare and Medicaid.   The Government alleged that Dey unlawfully reported inflated prices for the following drugs:  Albuteral Sulfate, Albuterol MDI, Cromolyn Sodium, and Ipratropium Bromide.

The qui tam lawsuit was brought on behalf of the Government by the principals of Ven-A-Care of the Florida Keys, Inc., a Florida home-infusion company.  As a reward for disclosing Dey’s fraud upon the Government, the whistleblowers will receive a $67.2 million share of the overall settlement.

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