Today’s settlement stems from a lawsuit filed by a whistleblower against several pharmaceutical companies accused of Medicaid fraud. The case is still proceeding against Dey, Inc., Mylan Pharmaceuticals, Inc., Sandoz, Inc. and their parent companies. Schering-Plough recently merged with Merck, and is now known as Merck & Co.

The settlement resolves allegations that Warrick Pharmaceuticals, a subsidiary of Schering-Plough, deliberately inflated the Average Wholesale Prices (AWPs) it reported to California for Albuterol.

For the full press release, go to: http://ag.ca.gov/newsalerts/release.php?id=1842.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

By agreeing to participate in the Medicaid Rebate Program and signing these rebate agreements, the four companies agreed to pay quarterly rebates to Medicaid that were based upon the amount of money that health care program paid for each company’s drugs. The precise amount of a rebate is determined in part by whether a drug is considered an “innovator” drug or a “non-innovator” drug. The rebate that must be paid for innovator drugs is higher than the rebate for non-innovator drugs.

Each of the companies agreed to pay a settlement to resolve allegations that it had sold innovator drugs that were manufactured by other companies and had classified those drugs as non-innovator drugs for Medicaid rebate purposes. As a result of the improper classification of these drugs, the companies underpaid their rebate obligations under the Medicaid Rebate Program. The drugs include Mylan’s nifedipine extended release tablets, UDL’s Selegiline HCL, AstraZeneca’s Albuterol, Ortho McNeil’s Dermatop and others.

For the full release, go to: http://www.usdoj.gov/opa/pr/2009/October/09-civ-1120.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

According to GAO’s summary of the report, the government agency found tens of thousands of Medicaid beneficiaries and providers involved in potential fraudulent purchases of controlled substances, abusive purchases of controlled substances, or both through the Medicaid program. The report looked specifically at California, Illinois, New York, North Carolina, and Texas.

Key findings include:

• About 65,000 Medicaid beneficiaries in the five selected states acquired the same type of controlled substances from six or more different medical practitioners during fiscal years 2006 and 2007 with the majority of beneficiaries visiting from 6 to 10 medical practitioners. Such activities, known as doctor shopping, resulted in about $63 million in Medicaid payments and do not include medical costs (e.g., office visits) related to getting the prescriptions.
• Medicaid paid over $2 million in controlled substance prescriptions during fiscal years 2006 and 2007 that were written or filled by 65 medical practitioners and pharmacies barred, excluded, or both from federal health care programs, including Medicaid, for such offenses as illegally selling controlled substances.
• Pharmacies filled controlled substance prescriptions of over 1,800 beneficiaries who were dead at that time.

For the full report and GAO recommendations, go to http://www.gao.gov/new.items/d09957.pdf.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

Between October 2002 to June 2006, prosecutors “allege the pharmacy billed Missouri and Illinois Medicaid for more drugs than it purchased, charged for brand name medicine when it dispensed generic, and billed without proper medical authorization,” according to the Chicago Tribune article.

For the full article, go to: http://www.chicagotribune.com/news/chi-ap-mo-medicaidfraud,0,6683688.story.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

West Virginia is asking $2 billion under the state’s Consumer Credit and Protection Act, related to the drug company’s dissemination of an alleged inadequate label on its Zyprexa antipsychotic product. The lawsuit claims that Eli Lilly should be punished for disseminating the inadequate label.

Eli Lilly claims West Virginia is overstepping its bounds and into those of the FDA.

According to the article, the motion also says that penalizing Eli Lilly $5,000 for each Zyprexa prescription distributed from Feb. 28, 2002-Oct. 2007 (which is about 400,000 with the alleged improper labeling) would “lead to a grossly disproportionate punishment” under the U.S. Constitution.
In January, Eli Lilly agreed to pay $1.4 billion to settle federal civil and criminal claims. The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million, according to the article on LegalNewsline.com.

To read the article in its entirety, go to: http://www.legalnewsline.com/news/221408-eli-lilly-w.vas-claim-for-civil-penalties-inappropriate-greedy.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

The suit alleges that Wyeth knowingly failed to give the government the same discounts it provided to private purchasers, as required by Medicaid law. According to the release, between 2000 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide for the drugs Protonix Oral and Protonix IV, two proton pump inhibitors used to suppress stomach acid. This pricing arrangement required that the hospitals purchase both drugs together, under a so-called “bundled” arrangement and it offered them a steep discount for doing so. Wyeth did this in part to gain access to the far more lucrative retail outpatient market, intending that patients who used the intravenous version of Protonix in the hospital would later purchase Protonix Oral once discharged. Under the bundled arrangement, hospitals that placed both products on their formularies and attained certain market share requirements were entitled to up to a 94% discount off the list price of Protonix Oral and up to 80% off the list price of Protonix IV. Although Wyeth was required under the Medicaid Drug Rebate Program to determine the effective prices paid by hospitals under this arrangement and to pass along the benefit of the lowest prices to the state Medicaid programs, Wyeth allegedly failed to do so.

For more on this case, go to US DOJ website

For more information about Qui Tam law,  Medicare Fraud and Health Care Fraud , contact Nolan and Auerbach, PA.

The government’s investigation of the pharmaceutical fraud began as the result of a whistleblower lawsuit under the False Claims Act by a former sales representative for Orphan. Orphan engaged in a scheme to expand the market for Xyrum by marketing and promoting the drug to physicians for “off-label” use which included using a psychiatrist in promotional speaking engagements. The psychiatrist with the approval of Orphan sales personnel also showed physicians how to obtain reimbursement from Medicare and Medicaid for these unapproved uses. The criminal prosecution arose out of a criminal misbranding scheme by which physicians would write presciptions for Xyrum that were not reimburseable for Medicare and Medicaid.

“Pharmaceuticals manufactured under strict standards can still injure or kill if used for unapproved purposes. Here, the risk was not from willful abuse by users; it was from a concerted campaign by the manufacturer to push a drug for off-label uses. This posed a serious health risk and constitutes a serious crime,” said FBI Assistant Director-in-Charge, New York Field Office, Mark J. Mershon.
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