Brown reaches $23 million settlement with drugmaker

Kathy Woods Dec. 17, 2009, 9:00pm

Jerry Brown (D)

SACRAMENTO, Calif. (Legal Newsline)-California Attorney General Jerry Brown has reached a $21.3 million dollar settlement with Schering-Plough Corporation.

The company had been accused of deliberately inflating the price of Albuterol and other drugs causing millions of dollars in over payment in pharmacy reimbursements.

Schering-Plough develops, markets, and sells a variety of medicines, including, antihistamines, corticosteroids, antibiotics, anti-infective and antiviral products.

"With health care costs spiraling out of control, it's unconscionable that a Fortune 500 pharmaceutical company deliberately inflated its drug prices to cheat California's public health care system out of millions of dollars," Brown said. "This is a company that made more than $12 billion in profits last year, yet still raided the pockets of California taxpayers."

The rates that pharmacies are reimbursed depends on the Average Wholesale Prices that reported by the drug manufactures. Reporting fraudulent AWPs is in direct violation of the California False Claims Act.

The California Department of Health Care Services, which is responsible for administering Medi-Cal, will receive $20.1 million of the settlement, while the rest will go to the Attorney General's False Claim Fund.

The Attorney General's False Claim Fund is used for investigating false claims and the prosecution of false claims.

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