Drug manufacturer Organon USA Inc. has agreed to pay $31 million to settle claims from the federal government and several states, including New York and Kentucky, that it underpaid rebates to state Medicaid programs. Organon faced two separate lawsuits in Texas and Massachusetts federal court, claiming the company underpaid Medicaid rebates, offered improper financial incentives to nursing home pharmacy companies, misrepresented drug prices and promoted drugs for off-label uses.
Under the terms of the settlement, New York’s Medicaid program will receive nearly $2.5 million of the $31 million settlement. Kentucky will receive nearly $350,000, while in Idaho almost $53,000 of the funds will go to its Medicaid program. New York Attorney General Schneiderman said in a statement:
Preserving the integrity of our Medicaid Program and weeding out those who seek to defraud it is a top priority for my office. We will keep fighting to ensure that companies that skirt the law for financial gain will be held accountable.
It should be noted that Organon’s assets are now owned by Merck & Co. The New York attorney general also pointed out that a National Association of Medicaid Fraud Control Units team helped the parties reach this settlement agreement, and that group included representatives from New York, California, Texas and Ohio’s state Attorneys General offices. Kentucky Attorney General Jack Conway said in a statement:
Drug companies that engage in illegal or fraudulent practices to sell their products will not be tolerated in Kentucky. I am pleased that this settlement allows us to recover funds for our vital state Medicaid program.
The drug industry cannot be allowed to cheat the Medicaid programs run by state governments. The courts have been very active in the litigation involving this type fraud. I am pleased to say that our firm got this litigation started when we filed suit on behalf of the State of Alabama in January of 2005. Since that time, a number of states have successfully filed suits against the drug companies that had cheated their states.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.