Attorney General Sam Olens announced today that Georgia has joined with other states and the federal government to settle allegations that drug manufacturer Organon underpaid rebates to Georgia’s Medicaid program, offered improper financial incentives to nursing home pharmacy companies, promoted its anti-depressants for unapproved uses and misrepresented its drug prices to Georgia’s Medicaid program.

“This settlement holds Organaon accountable for falsely billing our Medicaid program and marketing drugs for off-label uses,” said Olens. “There are already too many excess prescription drugs in our communities. Promoting drugs for uses that are not approved by the FDA is unacceptable and only adds to the prescription drug abuse problem we face.”

Organon was headquartered in Oss, Netherlands and the company’s assets are now owned by Merck. The total value of the settlement is $31 million, of which Georgia received $413,444.48 in restitution and other recoveries. The settlement resulted from two whistleblower lawsuits filed in the United States District Court for the District Massachusetts and the United States District Court for the Southern District of Texas, and resolves four separate allegations.

Underpaid Rebates: The government alleged that Organon did not include rebates and discounts in its best price reporting, and therefore, underpaid rebates owed to the Georgia Medicaid Program. The federal Medicaid Drug Rebate Program requires that all drug manufacturers which supply products to Medicaid recipients provide the Medicaid programs the benefit of the “best price” available for that product.

Kickbacks: The government alleged that Organon offered nursing home pharmacy companies market share discounts and rebates to encourage the use of Remeron and Remeron SolTab over competing anti-depressants, which violated the federal Anti-Kickback Statute and resulted in the submission of false claims to the Georgia Medicaid program.

Off-Label Promotion: The government alleged that Organon promoted the sale and use of anti-depressants Remeron and Remeron SolTab for conditions that were not approved as safe and effective by the U.S. Food and Drug Administration. Specifically, Organon marketed drug side effects as possible benefits and promoted the use of Remeron in children and adolescents.

Pricing Misrepresentations: The government alleged that Organon reported false and inflated prices to Georgia’s Medicaid program, and then offered the drugs at a lower cost as a financial inducement to nursing home pharmacy companies, increasing the amount of the Medicaid reimbursement to those companies.