Update 5:40 p.m.
Four pharmaceutical companies have agreed to settle False Claims Act allegations for a combined $124 million, the largest health care fraud recovery that federal prosecutors in New Hampshire have ever obtained, the Justice Department said today.
Mylan Pharmaceuticals Inc., UDL Laboratories Inc., AstraZeneca Pharmaceuticals and Ortho-McNeil Pharmaceutical Inc. entered into settlement agreements with the Justice Department following claims that the companies failed to pay appropriate rebates to state Medicaid programs for drugs that the state programs paid for. The companies, Justice officials said, agreed to pay quarterly rebates to Medicaid based on the amount of money the state programs were paying for the pharmaceutical companies’ drugs.
The settlements, filed in the U.S. District Court for the District of New Hampshire, were not admissions of liability. A lead prosecutor in the case, John Farley, an assistant U.S. attorney in Concord, said despite the district’s small size health care fraud prosecution is a big concern. Mylan and UDL agreed to pay $118 million to resolve allegations that they underpaid their rebate obligations. AstraZeneca paid $2.6 million to the state and federal governments, and Ortho McNeil paid $3.4 million. Click here to see the Justice Department break-down of the recipients of the money.
"These cases exemplify the strong cooperation between the Department of Justice and the states in protecting American taxpayers," Assistant Attorney General Tony West of the Civil Division said in a statement. John Kacavas, U.S. Attorney for the District of New Hampshire, said in a statement that “[t]he government is committed to identifying health care fraud and ensuring that companies that benefit from doing business with the government agree to play by the rules.”
The whistleblower, Ven-A-Care of Key West, Fla., is expected to receive nearly $11 million as its share of the recovery. Ven-A-Care’s counsel, James Breen of Alpharetta, Georgia, said: “We’re happy to be able to help the Justice Department and the taxpayer.”
Counsel for Mylan and UDL, Hogan & Hartson partners John Diesenhaus and Adam Levin in the firm’s Washington office, were not immediately reached for comment this afternoon. Morgan, Lewis & Bockius partner John Dodds represented AstraZeneca in the settlement. Dodds, who practices in the firm’s Philadelphia office, was not reached for comment. Ortho-McNeil’s lawyers, Robert Ullman, a partner in Boston’s Nutter McClennen & Fish, and Reed Smith partner Joseph Metro in Washington, also were not reached this afternoon.
A spokesman for Ortho-McNeil, Ernie Knewitz, said in a statement: “As part of a settlement agreement reached in 2007, Ortho-McNeil agreed to pay $3.4 million to the federal and state governments to resolve discrepancies relating to the amount of Medicare and Medicaid rebates the company had paid for DERMATOP® between 1998 and 2003. The company paid $1.87 million of this settlement to the Federal government in 2007, and as the proceedings in this matter have now been concluded, the remaining balance will be disbursed later this week.”