Health Care Giants Dominate List of Justice Department Fraud Settlements

Monday, November 30, 2009

Pharmaceutical manufacturers and other health industry companies were responsible for the biggest fraud settlements obtained last year by the Department of Justice. Companies like Cephalon Inc. and Merck & Co. paid more than $1 billion combined for defrauding Medicaid and selling drugs for purposes not approved by the Food and Drug Administration.

Merck agreed to pay $650 million to resolve allegations that it failed to pay proper rebates to Medicaid over sales of Zocor and Vioxx and offered kickbacks to physicians so they would prescribe company drugs to patients. Merck also was accused of offering Pepcid products to hospitals at drastically reduced prices as long as they refused to carry competitors’ antacid remedies.
Cephalon pled guilty to charges of marketing three drugs—Gabitril, Actiq and Provigil—for uses not cleared by the FDA. The settlement totaled $425 million.
The Amerigroup Corporation was slapped with a $225 million bill to settle allegations that it systematically avoided enrolling pregnant women and other high-cost patients in its Illinois managed care program, despite that the fact that it was funded by Medicaid, which required open enrollment.
-Noel Brinkerhoff


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