Pharmaceutical giant Aventis must pay more than 95 million dollars in an out-of-court settlement, after overcharging US and local health agencies for medications destined for underpriviledged patients, federal prosecutors said Thursday.
"We will continue to ensure that programs for the most vulnerable portions of our population do not pay any more for pharmaceutical products than they should under the law," Tony West, an assistant attorney general at the US Justice Department said in a statement announcing the settlement.
Aventis Pharmaceutical Inc., a wholly-owned subsidiary of Sanofi-Aventis, acknowledged that it violated the False Claims Act by misreporting drug prices for patients in the Medicaid Drug Rebate program for poor patients.
Under the program, Aventis was required to report to Medicaid the lowest price that it charged commercial customers, and pay quarterly rebates to the states for their Medicaid patients, based on those reported prices.
But Aventis deliberately misquoted the prices, underpaying rebates to Medicaid and overcharging some public health agencies for the medications.
The fraud occured between 1995 and 2000, and concerned the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ.
"We will continue to be vigilant in investigating and prosecuting those who scam the Medicaid system -- a system that is meant to benefit the poor" said Michael Loucks, acting US Attorney for the District of Massachusetts, in the Justice Department statement.
"When a drug company agrees to be a provider to the Medicaid programs, it agrees to sell its drugs to them at the same price it gives its best customers. We will, as here, pursue those who break their promises."