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UTAH JOINS $435 MILLION SETTLEMENT WITH DRUG MANUFACTURER
Attorney General Mark Shurtleff announced today that an agreement has been reached with Schering-Plough Corporation to settle allegations that the pharmaceutical manufacturer defrauded the Medicaid Program and improperly marketed drugs for "off-label" use. Schering will pay the state and federal government nearly $255 million in damages and penalties for Medicaid and federal health care programs. Also, a company division will plead guilty in federal court in Boston to criminal charges related to this conduct and pay $180 million in criminal fines.
"This is a huge recovery for taxpayers. Hopefully pharmaceutical manufacturers will finally get the message that breaking the law is bad for business and bad for consumers," says Shurtleff. The conduct at issue with the Pennsylvania-headquartered manufacturer falls into three categories:
- Schering's exclusion of certain price discounts from the formula used to calculate Medicaid Program rebates. This resulted in an underpayment of those rebates for the allergy drug Claritin Redi-Tabs and the potassium supplement K-Dur.
- The improper "off-label" marketing of brain cancer medication Temodar.
- The company's illegal payments to physicians to induce them to prescribe hepatitis drugs PEG-Intron and Rebetron and bladder cancer medication Intron-A.
Resulting losses to state Medicaid Programs were in excess of $80 million which, under the terms of the national settlement, Schering will be required to repay along with penalties, resulting in a total Medicaid recovery of $203 million.
Under the terms of Utah's settlement, the state will recover $1,082,539 for the Utah Medicaid Program; $323,319 of that amount will be paid directly to Utah, with the balance going to the federal government to reimburse its share of the Medicaid costs.
The civil settlements with Schering also requires the company to enter into an agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services in order to monitor the company's operations and ensure compliance with the law in the future.
The settlement was negotiated by the National Association of Medicaid Fraud Control Units joined in by 49 states and the District of Columbia. Assistant Attorney General Robert Steed, director of the Medicaid Fraud Control Unit, represented Utah in the settlement negotiations. The Utah Attorney General's Office oversees the Medicaid Fraud Unit to protect the integrity of Utah's Medicaid program. The public can learn more about Medicaid fraud or report abuse at the Utah Medicaid Fraud Web page or call (800) 244-4636.
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