The drugmaker, which is best known for the Lunesta sleeping pill, just issued a statement saying an internal audit of its best pricing for Medicaid and certain state programs went awry.

This sweeping - and embarassing - review covers 2002 through 2007, and depending upon the final examination, Sepracor estimates that rebates that must be paid to Medicaid and state programs will be between $80 million and $100 million. As a result, the drugmaker expects to restate financial statements for the quarters ended March 31, June 30 and September 30, 2007 and 2006, as well as for the entire fiscal years of 2002 through 2006.

“Based on the outcome of the review, the Company may be required to revise the prices reported under its federal Medicaid rebate agreement, other federal programs and certain state agreements, and to pay the corresponding additional rebate amounts or other amounts due under those programs for the period 2002 through 2007,” according to the statement.

In particular, Sepracor’s review is focusing on transactions involving Pennsylvania’s General Assistance program that were excluded from calculating the best price for which reimbursements were eligible under Medicaid. The review is also focusing on prices reserved for Public Health Service covered entities to customers that weren’t qualified to receive the PHS price.