Coakley's pharmaceutical settlement worth $500K

Keith Loria Dec. 21, 2010, 4:59pm


BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Monday that her office has settled with a drug manufacturer that allegedly violated the state's False Claims Act.

The Spring Valley, N.Y.-based Par Pharmaceutical Inc., allegedly reported inflated and incorrect prices to drug industry price reporting services. Because of those false numbers, the Massachusetts Medicaid Program paid inflated amounts for ingredient costs on prescriptions for Medicaid recipients.

Under terms of the agreement, the pharmaceutical manufacturer will pay $500,000 to the State to settle the pending lawsuit. All funds recovered will be returned to the Massachusetts Medicaid Program, also known as MassHealth.

"The Massachusetts Medicaid Program provides vital health care services to thousands of poor, elderly and disabled Massachusetts residents. This settlement is a step forward in our efforts to correct false price reporting," Coakley said.

"Our office will continue to work with MassHealth and the federal government to maintain the integrity of the pharmaceutical reimbursement program and ensure that it is fair to all parties."

Between 1998 and 2003, Par allegedly manufactured and sold such drugs as Ibuprofen and Ranitidine HCL using the false numbers.

Par admitted no wrongdoing in agreeing to the settlement.

Coaley has already settled with 11 other pharmaceutical companies as part of her effort, recovering a total of $22.9 million from those companies for the Medicaid program. The companies include Dey Inc.; Barr Laboratories Inc.; Duramed Pharmaceuticals Inc; Ethex Corporation; Roxane Laboratories Inc.; Teva Pharmaceuticals USA Inc.; Ivax Corporation; Watson Pharma Inc., formerly known as Schein Pharmaceutical Inc.; Watson Pharmaceuticals Inc.; Actavis Elizabeth LLC, formerly known as Purepac Pharmaceutical Co.; and Mylan Inc. and Mylan Pharmaceuticals Inc, its wholly-owned subsidiary.

Coakley alleged that by reporting false and inflated prices, the pharmaceutical companies involved caused the Medicaid Program to pay inflated amounts for ingredient costs for prescriptions for Medicaid recipients.

In September, Coakley's office won a $4.6 million verdict from a jury in federal court against another defendant, Merck & Co., formerly known as Schering-Plough Corporation, and Schering Corporation and Warrick Pharmaceuticals Corporation Inc., its subsidiaries.

Massachusetts has pending a motion for the award of $191 million in civil penalties as a result of the jury's verdict. The defendants have pending a motion for judgment in their favor, notwithstanding the jury's verdict, or a new trial.

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