INDIANA receives $2.2M for overcharges to Medicaid


Indiana Attorney General Steve Carter says Indiana has received $2.2 million as part of a $500 million national settlement with drug maker Bristol-Myers Squibb (BMS).

The settlement announced last September resolved allegations that the company and its wholly-owned subsidiary, Apothecon, Inc. provided false pricing information for more than 20 drugs leading to excessive reimbursement. It also resolved a number of other claims including off-label marketing and kick-back violations.

Indiana’s total recovery amount was $5.8 million in the settlement. The $2.2 million represents the state’s share of the Medicaid loss with the remainder going to the federal government for its share.

“Taxpayers are ultimately harmed when companies take advantage of governmental services to help the underprivileged,” said Carter. “The recovery of $5 million for Indiana is significant and is one of several such recoveries over the past several years.”

BMS and its subsidiary Apothecon, Inc. were alleged to have engaged in various activities between 1994 and 2004 resulting in overpayments by Medicare and Medicaid Programs.

Some of the claims included:

Payments to physicians in the form of extravagant travel expenses and fees for advisory board service, preceptorships and consulting, all to induce them to purchase drugs;

Payments to retail pharmacies and wholesaler customers in the form of stocking allowances, prebates, and free goods, all to induce them to purchase drugs;

Off-label promotion of Abilify, an atypical antipsychotic drug, to treat pediatric patients and to treat geriatric patients for dementia-related psychosis;

Reporting falsely inflated average wholesale prices, thereby creating a “spread” between the reimbursement rates for federal health care providers and the actual prices for drugs; and

Misreporting its best price for the anti-depression drug, Serzone.

The settlement includes a Corporate Integrity Agreement with the federal government, which requires BMS to report accurate average sales prices and average manufacturer prices for its drugs covered by Medicare and other health care programs.

Carter’s Medicaid Fraud Control Unit (MFCU) handled the settlement agreement. The Unit has recovered more than $17 million for the state in the first seven months of 2008 – exceeding the record $14 million it recovered for the Medicaid program last year.

The agreement includes 43 states, the District of Columbia and the federal government.


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