Four pharmaceutical companies announced they will pay a total of $124 million nationally as part of a major Medicaid fraud case.
North Carolina Attorney General Roy Cooper announced that Mylan Pharmaceuticals, Inc., UDL Laboratories, Inc., AstraZeneca Pharmaceuticals LP, and Ortho McNeil Pharmaceutical, Inc. “agreed to the settlements to resolve claims that they underpaid rebates owed to Medicaid.”
According to the report, all four of the companies “agreed to pay quarterly rebates to Medicaid based upon the amount of money that Medicaid paid for each company’s drugs.” In determining the amount of rebate owed, companies made two distinctions: whether a particular drug is considered an innovator drug or a non-innovator drug. Drug companies required to pay a higher rebate amount for innovator drugs.
As a result of this distinction; several states and the federal government alleged that these drug companies misclassified drugs so that they could pay less in rebates to the Medicaid Program.
Mylan and UDL allegations involved nifedipine extended release tablets, which are used to treat angina and high blood pressure, and Bumetanide, which is used to treat adema. The settlements these companies paid totaled $118 million for underpaid Medicaid rebates.
AstraZeneca underpaid Medicare rebates for Albuterol, a medication used to treat asthma and other breathing disorders. They agreed to pay $2.6 million.
Ortho McNeil underpaid its rebates for Dermatop, which is used to treat skin conditions. The company agreed to pay $3.4 million.
The majority of all money recovered is going to federal and state Medicaid efforts. The work of a National Association of Medicaid Fraud Control Units led negotiations with all four pharmaceutical companies.