Ashley Perry Oct. 16, 2014, 1:48pm

FRANKFORT, Ky. (Legal Newsline) - Kentucky is part of a $31 million settlement agreement reached with drug manufacturer Organon that stems from accusations of Medicaid fraud, Attorney General Jack Conway announced on Wednesday.

The company, which is now owned by Merck, is accused of underpaying rebates to state Medicaid programs, offering inappropriate financial perks to nursing home pharmacy companies, promoting unapproved uses for antidepressants and charging inflated fees to Medicaid.

Kentucky's share of the settlement is $347,929, of which $235,346 will go to the state's Medicaid program and $112,583 will be returned to the federal government.

The settlement is the result of two whistleblower lawsuits filed in U.S. district courts in Massachusetts and Texas.

“Drug companies that engage in illegal or fraudulent practices to sell their products will not be tolerated in Kentucky,” Conway said. “I am pleased that this settlement allows us to recover funds for our vital state Medicaid program.”

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