February 13, 2008 Louisiana to Receive More Than $1.5 Million in Medicaid Fraud Settlement

Baton Rouge, Louisiana, Feb 13, 2008 -

Baton Rouge – Two drug manufacturers accused of defrauding the Medicaid Rebate Program by inflating prices have agreed to national settlements that will regain Louisiana more than $1.5 million in lost money.

Merck & Co. and Aventis Pharmaceuticals Inc. have agreed to pay Louisiana $1,489,693 and $80,249, respectively, for allegedly misrepresenting the prices of some of their products to state Medicaid programs.

According to Jerry Phillips, director of the Louisiana Medicaid Program, “The settlement money will be divided between the state’s General Fund and the Medical Assistance Program Fraud Detection Fund.”

Drug manufacturers report product prices to state Medicaid programs every quarter to assist the programs in setting accurate reimbursement rates.  The lawsuits filed against Merck and Aventis alleged the two companies falsely reported product prices as being substantially higher than the actual prices at which their products were available in the market place.  This resulted in Medicaid programs across the country paying inflated prices for their products.

“Controlling fraud in the Medicaid Program is a challenge we’re constantly up against,” said Phillips.  “It’s rewarding when we’re able to right the wrongs that have infiltrated the system.”

The time of the alleged misrepresentation occurred between 1996 and 2001 by Merck, and between 1997 and 2004 by Aventis.