Novartis Pays $150M To Settle Pricing Fraud

In the latest instance of pharmaceutical fraud, the Sandoz unit of Novartis earlier this week agreed to pay $150 million to settle lawsuits filed by the states of Florida and California, as well as a whistleblower, to settle charges that it deliberately misreported pricing information in order to hike reimbursements from Medicaid.

This is only the latest settlement stemming from accusations that a drugmaker rigged the average wholesale price charged to federal healthcare systems. Numerous lawsuits and charges have been brought against nearly every large drugmaker by the feds and many states in recent years. The US Department of Justice has recovered some $2 billion from drugmakers over pricing fraud.

To settle, Sandoz is paying the federal government $86.5 million, while Florida will receive $15.2 million and $40 million will go to California. The remaining $8.3 million will go to Ven-A-Care of the Florida Keys, which filed the whistleblower lawsuit and whose allegations have led to settlements with many other drugmakers (see here, here and here… and this is the settlement).

[UPDATE: We received this remark from Patrick Burns of Taxpayers Against Fraud, a non-profit that supports whistleblower lawsuits: "This latest Average Wholesale Price case is a reminder that billions of dollars have been returned to the federal government and the states in cases that were not joined by the US Department of Justice. What we are seeing now, are more and more whistleblowers and their lawyers partnering with the states to recover stolen Medicaid money. DoJ cannot handle all the pharma fraud cases by themselves, and so the states are starting to step up and lawyer up, and more and more companies are going to have to pay up as a consequence."]

benjamins pic thx to amagill on flickr