Drug and DME Pricing

August 18, 2017

Illinois and other states announced a $465 million settlement between the federal government and states with Mylan Inc. and its wholly-owned subsidiary, Mylan Specialty L.P. (Mylan), to resolve allegations that Mylan knowingly underpaid rebates owed to the Medicaid program for EpiPen® and EpiPen Jr.® (EpiPen) dispensed to Medicaid beneficiaries. The settlement resolves allegations that from July 29, 2010 to March 31, 2017, Mylan submitted false statements to the Centers for Medicare and Medicaid Services (CMS) that incorrectly classified EpiPens under terms defined in the Rebate Statute and Rebate Agreement. Mylan also failed to report a "Best Price" to CMS for EpiPens, as directed by the same statute. As a result, Mylan submitted false statements related to EpiPens to CMS and the states for Medicaid rebate purposes and underpaid EpiPen rebates to the state Medicaid programs. IL, IA

April 2, 2017

Sanofi-Pasteur agreed to pay roughly $20 million to resolve claims it incorrectly calculated drug prices and thereby overcharged the U.S. Department of Veterans Affairs for drugs under two contracts between 2002 and 2011. DOJ

November 21, 2016

Georgia 41 other states filed an amended antitrust lawsuit against the makers of Suboxone, a prescription drug used to treat opioid addiction, over allegations that the companies engaged in a scheme to block generic competitors and cause purchasers to pay artificially high prices. Reckitt Benckiser Pharmaceuticals, now known as Indivior, is accused of conspiring with MonoSol Rx to switch Suboxone from a tablet version to a film (that dissolves in the mouth) in order to prevent or delay generic alternatives and maintain monopoly profits. According to the lawsuit, when Reckitt introduced Suboxone in 2002 (in tablet form), it had exclusivity protection that lasted for seven years, meaning no generic version could enter the market during that time. Before that period ended, however, Reckitt worked with MonoSol Rx to create a new version of Suboxone – a dissolvable film, similar in size to a breath strip. Over time, Reckitt allegedly converted the market away from the tablet to the film through marketing, price adjustments, and other methods. GA

April 27, 2016

Pharmaceutical giants Wyeth and Pfizer, Inc. agreed to pay $784.6 million to resolve allegations that Wyeth violated the False Claims Act by reporting to the government false prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV.  Under the state Medicaid programs, drug companies must provide Medicaid rebates based on the best prices they offer other customers.  According to the government, Wyeth hid from Medicaid bundled discounts it provided to thousands of hospitals across the country on Protonix Oral and Protonix IV.  By failing to report these bundled discounts, Wyeth allegedly avoided paying hundreds of millions of dollars in rebates.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Lauren Kieff, a former hospital sales representative for AstraZeneca and William St. John LaCorte, a physician practicing in New Orleans.  They will collectively receive a whistleblower award of roughly $98 million from the proceeds of the federal and state settlements.  Whistleblower Insider

April 27, 2016

Michigan and 34 other states reached an agreement in principle to settle allegations against Wyeth, a subsidiary of Pfizer, Inc. The settlement will resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales, Protonix Oral and Protonix IV between 2001 and 2006. Both are drugs that are used to treat conditions such as acid reflux. Under the settlement Wyeth agreed to pay $784.6 million to the United States and the States. Over $371 million of this amount will go to the Medicaid Program. The settlement stems from two whistleblower lawsuits which were filed in the United States District Court for the District of Massachusetts. The United States, 35 states (including Michigan) and the District of Columbia intervened in the lawsuits. NY, NJ, MI, WA

January 5, 2016

Nashville Pharmacy Services, LLC, and its majority owner Kevin Hartman, agreed to pay up to $7.8 million to settle charges they violated the False Claims Act by overbilling Medicare and TennCare for pharmacy services.  Specifically, the government claimed the Nashville-based pharmacy that specializes in dispensing HIV and AIDS-related medications automatically refilled medications without a request from the beneficiary or their physician; improperly waived TennCare and Medicare co-payments without an individualized assessment of ability to pay; improperly used pharmaceutical manufacturers’ co-payment cards to pay the co-payments of Medicare beneficiaries; billed for medications dispensed after the deaths of certain beneficiaries; and billed for medications that lacked a valid prescription.  The allegations originated in a whistleblower lawsuit filed by Marsha McCullough, a former Nashville Pharmacy order entry technician, under the qui tamprovisions of the False Claims Act.  She will receive a whistleblower award of 18 percent of the government’s recovery which could amount to $1.4 million.  Whistleblower Insider

November 4, 2015

AstraZeneca LP and Cephalon, Inc. agreed to pay $54 million to settle government charges they violated federal and state False Claims Acts by overcharging state Medicaid programs for their pharmaceutical products.  AstraZeneca will pay $46.5 million and Cephalon, the wholly-owned subsidiary of Teva Pharmaceutical Industries. Ltd., will pay $7.5 million.  According to the government, the two pharmaceutical companies underpaid drug rebates owed the states under the Medicaid Drug Rebate Program, which requires drug makers to periodically return to the government a portion of their Medicaid proceeds.  The allegations first arose in a whistleblower lawsuit filed by Virginia pharmacist and attorney Ronald Streck under the quit tam provisions of the Federal False Claims Act, New York False Claims Act and other state false claims statutes.  Mr. Streck will receive a yet-to-be-disclosed whistleblower award from a portion of the government’s recoveries.  Whistleblower Insider

September 1, 2015

Discount department store chain KMART Corp., which operates approximately 780 in-store pharmacies throughout the US, agreed to pay $1.4 million to resolve allegations it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements.  According to the government, Kmart improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting them to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obligated to pay, and by also offering them varying levels of discounts on the purchase of gasoline at participating gas stations.  The allegations originated in a whistleblower lawsuit filed by former Kmart pharmacist Joshua Leighr under the qui tam provisions of the False Claims Act.  Leighr will receive a whistleblower award of approximately $248,500.  DOJ

August 3, 2015

Rouzbeh Javaherian, owner of Los Angeles-based Westaid Pharmacy and Medical Supply, was sentenced to 18 months in prison and to pay $644,060 in restitution for his role in a fraud scheme involving the Medicare Part D prescription drug program.  Specifically, Javaherian paid illegal cash kickbacks to Medicare beneficiaries to induce them to submit their prescriptions to Westaid.  Javaherian then filled some of those prescriptions, but also submitted false claims to Medicare Part D plan sponsors for prescriptions that he did not actually fill.  DOJ