Navigation Links
Merck to Pay More Than $650 Million to Resolve Claims of Fraudulent Price Reporting and Kickbacks
Date:2/7/2008

WASHINGTON, Feb. 7 /PRNewswire-USNewswire/ -- Merck & Company has agreed to pay more than $650 million to resolve allegations that the pharmaceutical manufacturer failed to pay proper rebates to Medicaid and other government health care programs and paid illegal remuneration to health care providers to induce them to prescribe the company's products, the Justice Department announced today. The allegations were brought in two separate lawsuits filed by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act.

"Not only is the combined recovery in these two cases one of the largest healthcare fraud settlements ever achieved by the Justice Department," said Attorney General Michael B. Mukasey, "it reflects our continuing effort to hold drug companies accountable for devising pricing schemes that deliberately seek to deny federal health care programs the same lower prices for drugs that are available to other commercial customers."

H. Dean Steinke, a former Merck employee, alleged in his suit filed in Philadelphia that Merck violated the Medicaid Rebate Statute in connection with its marketing of its drugs Zocor and Vioxx. (Zocor is a cholesterol lowering drug and Vioxx, pulled from the market by Merck in September of 2004, was used for the treatment of acute pain and in the treatment of arthritis.) Merck allegedly offered deep discounts for the two drugs if hospitals used large quantities of those drugs in place of competitors' brands.

The Medicaid Rebate Statute requires that drug manufacturers report their "best prices" and other cost information to the government in order to ensure that Medicaid obtains the benefit of the same discounts and price concessions that other purchasers enjoy. An exception to this rule allows manufacturers to exclude from the prices they report any discounted prices that are "nominal" in amount. Merck improperly termed as "nominal" the prices it offered to hospitals to boost their sales and excluded those discounts from the prices it reported to the government.

Steinke's suit further alleged that from 1997-2001, Merck had approximately fifteen different programs used by its sales representatives to induce physicians to use its many products. These programs primarily consisted of excess payments to physicians that were disguised as fees paid to them for "training," "consultation" or "market research." In fact, the government alleged that these fees were illegal kickbacks intended to induce the purchase of Merck products. Merck agreed today to pay $399 million plus interest to settle the Medicaid Rebate as well as the kickback allegations.

In a separate suit filed by physician William St. John LaCorte in New Orleans, it's alleged that Merck had established a marketing scheme in which it provided substantially reduced prices for its Pepcid products once the hospitals agreed to primarily use the drug instead of a competitor's. (Pepcid is used to reduce stomach acid and to treat heartburn and acid reflux.) Merck allegedly offered these incentives to hospitals in order to obtain the benefit of spillover business when patients would continue to purchase Pepcid once he or she was discharged. Merck improperly termed as "nominal" the prices it offered to hospitals to boost the sales of Pepcid, excluded those discounts from the prices it reported to the government, and thus effectively denied the government the benefit of these lower prices. Merck agreed today to pay $250 million plus interest to settle these allegations.

Under the two settlement agreements, the federal government will receive more than $360 million, and forty-nine states and the District of Columbia over $290 million. In addition, Mr. Steinke will receive $44,690,000 from the federal share of the settlement amount and an additional $23.5 million from the states. Similarly, Dr. LaCorte will receive a share of the proceeds from the federal and state settlement amounts under their respective qui tam statutes.

"Our health insurance programs rely upon the integrity of health providers, including pharmaceutical manufacturers, when they report to the government programs which reimburse their products and services with scarce funds," said Patrick L. Meehan, U.S. Attorney for the Eastern District of Pennsylvania, whose office led the investigation of the Steinke matter.

"Particularly in the wake of Hurricane Katrina, it is critical that precious government resources not be lost to fraud and abuse," said Jim Letten, the U.S. Attorney for the Eastern District of Louisiana, whose office led the investigation of the LaCorte matter. "This office is dedicated to prosecuting pricing fraud so that healthcare dollars go to help the most vulnerable of our citizens -- the disabled and the poor."

"The Office of Inspector General has a strong record of pursuing violations in the Medicaid drug rebate program and is working closely with Federal and State law enforcement to hold accountable pharmaceutical companies engaged in illegal practices resulting in Medicaid fraud," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services.

Today's settlement was the result of close cooperation between the Justice Department, state attorneys general and other law enforcement entities including Medicaid Fraud Control Units, and the Office of Inspector General of the Department of Health and Human Services.

As part of the resolution of these two cases, the Department of Health and Human Services Office of Inspector General (HHS-OIG) and Merck have entered into a five-year Corporate Integrity Agreement to ensure that such improper conduct does not occur in the future.


'/>"/>
SOURCE U.S. Department of Justice
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Merck Pays More Than $400 Million to Settle Federal, State Medicaid Fraud Investigation Sparked by Qui Tam Whistleblower Case Detailing Marketing Schemes for Vioxx(R), Zocor(R), Several Other Drugs
2. CORRECTED: Hagens Berman Sobol Shapiro Files Suit Against Merck and Schering-Plough
3. Lawsuit Filed in Florida Federal Court Over Marketing of Vytorin and Zetia By Merck and Schering-Plough
4. BioMarin Re-Acquires Rights to Kuvan in Canada From Merck Serono
5. ICx Technologies Works With Merck & Co., Inc. to Develop Cancer Diagnostic Technology
6. GlaxoSmithKline Obtains Exclusive U.S. OTC Marketing Rights to MEVACOR(R) (lovastatin) from Merck & Co., Inc.
7. The Lanier Law Firm Announces $4.85 Billion National Vioxx Settlement With Merck & Co. Inc.
8. Dynavax and Merck & Co., Inc. Announce Partnership to Develop HEPLISAV(TM), an Investigational Hepatitis B Vaccine Currently in Phase 3
9. ImClone and Bristol-Myers Squibb Announce Joint Agreement With Merck KGaA to Co-Develop and Co-Commercialize ERBITUX(R) in Japan
10. AHF Challenges Merck Over Steep Price of Its New AIDS Drug, Isentress
11. Mylan Vice Chairman and CEO Robert J. Coury to Ring NYSE Closing Bell(R) in Celebration of Merck Generics Acquisition
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/30/2016)... ... April 30, 2016 , ... Orlando-based Maximized Living has ... go for gold in Rio. Under the care of Maximized Living doctors at ... In an unprecedented showing, Maximized Living is sending the largest contingent of elite chiropractors ...
(Date:4/29/2016)... ... April 29, 2016 , ... Memorial ... for Graduate Medical Education (ACGME) that it has received accreditation for its residency ... of three residency programs that Memorial is currently pursuing, including Pediatrics and Internal ...
(Date:4/29/2016)... ... April 29, 2016 , ... Dr. Bernie Siegel, ... "LOVE, MEDICINE and MIRACLES") addresses touchy topics related to Death live on ... Dr. Bernie Siegel, author of a plethora of essential books-to-read for physicians ...
(Date:4/29/2016)... ... ... Spine Team Texas, a comprehensive spine physician group specializing in the treatment of ... invited to be a featured speaker at the Texas Society of the American College ... , Dr. R. Scott McPherson, a physical medicine and rehabilitation specialist, will speak ...
(Date:4/29/2016)... ... ... the deadliest type of skin cancer. Although only about 1 percent of skin cancer cases ... 10,000 people are expected to die of melanoma this year. The risk increases with age, ... most commonly diagnosed cancers in young women. A recent breakthrough in genetic studies may give ...
Breaking Medicine News(10 mins):
(Date:4/29/2016)... April 29, 2016 Glycotope GmbH, ... today announces the appointment of Dr. Alfredo Zurlo ... is an oncologist with many years clinical experience and ... industries. His last role was at Mologen AG where ... Executive Board. Previously Dr. Zurlo held various positions at ...
(Date:4/28/2016)...  While Abbott,s announced purchase of St. Jude ... and stent business, healthcare research firm Kalorama Information ... into patient monitoring.  Kalorama said that patient monitoring ... with double-digit growth expected the next 5 years, ... Patient Monitoring . Abbott Laboratories agreed to ...
(Date:4/28/2016)... 2016 Dr. ... und Stephen Schmidt werden ... ArisGlobal®, ein führender Anbieter cloudbasierter Softwarelösungen für ... dass neue Führungskräfte zum Team Sicherheit und ... vielfältige Erfahrungen mitbringen.  Dies wird die Geschäftseinheit ...
Breaking Medicine Technology: