Attorney General Thurbert Baker today announced that
Pharmaceutical manufacturers that supply products to Medicaid Recipients are required by the Federal Medicaid Drug Rebate law to give the Medicaid Programs the benefit of the “best price” available for those products. The manufacturers are required to file “best price” information with the Centers for Medicare and Medicaid Services (CMS). This information is then used to calculate rebates to be paid by these manufacturers to the state Medicaid Programs. In general, the lower the “best price”, the higher the rebate obligation tends to be. The federal law requires the “best price” reported by the manufacturers to include discounts. However, prices that are considered “merely nominal” are exempted from the reporting requirement. The states have maintained that “merely nominal” means the discounted price is not tied to any conditions, such as volume purchase requirements or market shares.
The cases that were pending in
The case in
In addition to the monetary recovery, Merck has entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services which will govern its future dealings with the Medicare and state Medicaid programs. Merck has begun voluntary compliance initiatives associated with their sales and marketing activities prior to the entry of these settlement agreements.
“This settlement constitutes not only a significant recovery for our Medicaid program, but also a clear message that pricing schemes designed to evade Medicaid laws will not survive scrutiny by the Office of Attorney General,” Attorney General Baker said. “This case should send a message to other pharmaceutical companies that the government will not tolerate rebate and “best price” avoidance through creative and erroneous rules interpretation.”
Attorney General Baker was joined in the settlement efforts by the National Association of Medicaid Fraud Control Units, a group comprised of Medicaid and Health Care Fraud Units from around the country.