May 28, 2009

Sanofi-Aventis Agrees To Pay Large Settlement

Sanofi-Aventis announced on Thursday that it would pay $95.5 million in a civil settlement with the US Department of Justice and the US Attorney's Office for the District of Massachusetts for overcharging federal and local health agencies for medications.

"We will continue to ensure that programs for the most vulnerable portions of our population do not pay any more for pharmaceutical products than they should under the law," Tony West, an assistant attorney general at the US Justice Department said in a statement on Thursday.

Aventis Pharmaceutical Inc admitted to violating the False Claims Act, which allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government.

The drugmaker was required to release figured of the lowest price charged to commercial customers, and to pay rebates accordingly. The company "deliberately misquoted the prices, underpaying rebates to Medicaid and overcharging some public health agencies for the medications," according to AFP.

The settlement involved misquoted prices occurring between 1995 and 2000 for Azmacort, Nasacort and Nasacort AQ "“ steroid-based anti-inflammatory nasal sprays.

Under the settlement, the drugmaker will be required to pay $95.5 million, plus interest, including the payment of almost $55.5 million "to resolve all federal claims and the establishment of an "opt-in" fund of approximately $40 million for states desiring to resolve Medicaid rebate claims relating to the same conduct," the company said in a written statement.

"Although the company believes API acted in accordance with the law at the time, the company elected to resolve this legacy matter through this settlement, without admitting any wrongdoing," Sanofi-Aventis said.

"We will continue to be vigilant in investigating and prosecuting those who scam the Medicaid system -- a system that is meant to benefit the poor" said Michael Loucks, acting US Attorney for the District of Massachusetts, in the Justice Department statement.

"When a drug company agrees to be a provider to the Medicaid programs, it agrees to sell its drugs to them at the same price it gives its best customers. We will, as here, pursue those who break their promises."

Earlier this month, the Justice Department filed a suit against drugmaker Wyeth for overcharging government programs for a stomach acid drug. Wyeth has responded, stating that its prices were fair.


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