HARRISBURG – Attorney General Tom Corbett today announced that Pennsylvania has received $7.8 million as part of a national settlement with the Schering-Plough Corporation over improper pricing and marketing practices for several of the company’s prescription medications.
Corbett said $4.2 million of the total funds will be used to reimburse Pennsylvania’s Medicaid program for lost funds due to Schering’s improper pricing of the allergy drug Claritin Redi-Tabs and potassium supplement K-Dur. The remaining balance will go to the federal government to reimburse its share of the Medicaid costs.
“Medicaid is intended to provide medical services to our most needy citizens,” Corbett said. “By intentionally defrauding the Medicaid program, the Schering-Plough Corporation took advantage of our poor and disabled by stealing valuable funding from those who otherwise could not afford treatments or medications.”
Schering-Plough’s fraudulent activities were uncovered as part of a national investigation into allegations of improper drug marketing and pricing. In August 2006, the United States Department of Justice ordered Schering to pay $435 million in restitution for their criminal and civil liabilities and take steps to enhance their compliance with federal and state laws.
Corbett said Schering Sales, a division of Schering-Plough, provided the FDA with false statements regarding their illegal promotional practices during a national medical conference for oncologists and conspired to continue the practice. In addition, Schering Sales failed to provide the HCFA with the lower price of Claritin Redi-Tabs that had been provided to a major health maintenance organization in order to avoid paying millions of dollars in rebates to the Medicaid program.
Corbett said the company plead guilty to one count criminal conspiracy to make false statements to both the Food and Drug Administration and the Heath Care Financing Administration (HCFA), was ordered to pay a $180 million fine, and will be permanently excluded from participation in all federal health care programs.
The civil portion of the settlement resolved allegations that Schering-Plough Corporation and Schering Sales knowingly caused the submission of false and/or fraudulent claims for Schering’s drugs that were not eligible for reimbursement. The company was ordered to pay $255 million in total fines and required Schering to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services.
Corbett said the settlement was negotiated by the National Association of Medicaid Fraud Control Units.
