Pharmaceutical Company Will Pay $21 Million for Overpricing Respiratory Drugs

December 24, 2009 

On December 17, 2009, Bloomberg News reported that Schering-Plough Corp., a drug company, will pay $21.3 million to settle a False Claims Act lawsuit against it. The settlement stems from a whistleblower lawsuit against several drug companies accused of Medicaid fraud.

The suit alleged that Schering deliberately inflated the average wholesale price it reported to California for Albuterol, a treatment for asthma and other breathing problems, as well as other drugs. As a result, California’s Medi-Cal program overpaid millions of dollars in pharmacy reimbursements.

Schlering was recently acquired by Merck & Co. of New Jersey. Merck didn’t admit wrongdoing and said its pricing practices complied with regulations and contracts. The settlement amount was reserved and significantly funded by Schering-Plough prior to its merger with Merck in November, Merck said.
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