Mylan Pharmaceuticals, UDL Laboratories, AstraZeneca Pharmaceuticals and Ortho McNeil Pharmaceutical have entered into settlement agreements for a total of $124 million to resolve claims that they violated the False Claims Act by failing to pay appropriate rebates to state Medicaid programs for “authorized generics” paid for by those programs, the U.S. Department of Justice announced October 19, 2009.

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.