Drug maker settles for $42M

Keith Loria Jul. 7, 2010, 11:58am


WASHINGTON (Legal Newsline) - Alpharma, Inc., will pay $42 million in a settlement with federal and state officials.

The Delaware-based pharmaceutical company agreed to pay the amount in a multistate deal with 49 states, the District of Columbia and the federal government.

Alpharma was alleged to have offered and paid compensations to entice health care practitioners to prescribe their drug, Kadian, a pain reliever. This allegedly resulted in thousands of false or fraudulent claims submitted to Medicaid from Jan. 2000-Dec. 2008.

The company was also accused of sponsoring advisory boards that would reward doctors, nurses and other health professionals by funding expensive trips to events at luxurious destinations.

"There is a clear distinction between making a profit and profiteering," Pennsylvania Attorney General Tom Corbett said. "This case represents an illegal attempt to cheat a system designed to help elderly and low income citizens obtain affordable health care."

The lead states in the investigation were Arkansas, Florida, South Carolina, Texas and Vermont, and the U.S. Department of Justice and the National Association of Medicaid Fraud Control Units joined.

They alleged that the drug manufacturer allegedly paid for training programs, consulting forums, research grants and speakers' bureaus as a way to have those involved become more likely to prescribe Kadian to their patients.

The company's drug is a sustained release morphine sulfate product believed to manage moderate to severe pain.

Alpharma also allegedly misrepresented the safety and efficacy of the drug to health professionals so they could better promote it beyond its FDA indication.

Overall, Medicaid programs will receive approximately $19.2 million of the total settlement.

More News