November 4, 2015
The federal government, District of Columbia, and 48 states, settled claims against AstraZeneca LP
and Cephalon, Inc.
, for a total of $54 million. The settlement resolves allegations that AstraZeneca and Cephalon under-paid drug rebates owed to the states. Under the federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs. The rebate program is designed to ensure that states pay competitive prices for drugs, and is calculated based on a percentage of the average price drug wholesalers pay for the manufacturers’ drugs. This average price, which the manufacturer reports to the federal government, is known as the Average Manufacturer’s Price or “AMP.” The greater the AMP reported by the manufacturer, the greater the rebate the manufacturer must pay. NY