Pharmaceutical company sued for overbilling Medicaid

A major pharmaceutical company has entered into settlement agreements worth more than $21 million from charges that the firm overcharged Medicaid programs of Michigan and Massachusetts. The settlement by the nation’s largest provider of pharmaceutical care for the elderly stems from a whistleblower lawsuit filed in federal court in 2003 by a former financial analyst. The pharmaceutical company was accused of not following “usual and customary” pricing regulations when charging Medicaid for prescription drugs supplied to residents of skilled-nursing facilities in the two states. In one instance, the whistleblower complaint alleged that in 2001 the pharmaceutical company was paid by private insurers an average of $27.75 per prescription, while its payments for Medicaid patients averaged $47.15 per prescription, according to a Washington-based whistleblower law firm that represented the former financial analyst. Under the settlement announced Tuesday, the pharmaceutical company will pay $9.45 million to Massachusetts and $11.6 million to Michigan. The settlement also requires the company to comply with pricing regulations, which include billing the lowest price the company charges a private third-party customer for the same drug. The pharmaceutical company denied any wrongdoing and cooperated during the investigation, according to a release from the Attorney General’s office.
In a filing with the Securities and Exchange Commission, the company said that the settlement agreement with Michigan and Massachusetts includes a provision to dismiss claims against the company included in another whistleblower lawsuit that is pending in Illinois related to the same charges. In recent years, legal troubles have cost the pharmaceutical company millions. Among other settlements, they paid $98 million last November to settle a whistleblower lawsuit that charged the company accepted kickbacks from a drug giant corporation.They admitted no guilt in the case. As part of that settlement, five whistleblower lawsuits were dismissed. If you suspect any fraud by a company or an insurance company call me at my offices located in Rockville or Baltimore at 1-800-320-0080 for a free consultation.