Mylan Labs To Pay $121M Over Medicaid Rebates

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rebatesThe agreement resolves a long-standing civil dispute with the U.S. Department of Justice over Medicaid rebates on sales from 2000 through 2004. In an interesting coda, Mylan plans to seek recovery of a big part of the settlement from any drugmakers that received overpayments, although there was no admission of wrongdoing.

The dispute involved whether authorized generics are is subject to the generic rate that Mylan paid on sales from 2000 through 2004, or a higher rate from a brand-name company in the guise of an authorized generic. The settlement includes meds supplied by brand-name drug makers to Mylan for sale as generics, Reuters writes.

The U.S. government classifies authorized generics as new drugs and subject to different reimbursement rates than traditional generic copies. And Mylan was treating its authorized generics as traditional generics — a practice it had begun before government guidelines on authorized generics were put in place and one that continued through 2004, the new service notes.

The settlement resolves claims by the federal government, relevant states and a private individual who brought the practice to the attention of authorities, according to the Mylan statement. A whistle-blower in the case, Ven-A-Care, a pharmacy in Key West, Florida, will receive about $10.8 million as its share of the recovery, according to the Justice Department.

Separately, Johnson & Johnson’s Ortho McNeil unit paid $3.4 million to resolve Medicaid allegations involving the anti-inflammatory ointment Dermatop and AstraZeneca agreed to pay $2.6 million related to rebates for its inhaler Albuterol.

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