Mylan to Pay $57M for Causing US and CA to Overpay for Drugs

April 13, 2012 

On February 28, 2012, Bloomberg News reported the settlement of a False Claims Act case in which Mylan Inc. (MYL), the generic-drug company, agreed to pay $57 million to settle claims it caused the U.S. and California to overpay for drugs.

The settlement came in cases filed by Ven-A-Care of the Florida Keys Inc., a specialty pharmacy, which claimed that Mylan defrauded the U.S. and California by falsely reporting inflated prices of drugs. Mylan knew that the governments would use those false reports to set higher reimbursement rates for Medicaid, Ven-A-Care claimed. California will get $26.3 million, the U.S. will get $22.2 million, and Ven-A-Care and its attorneys will get $8.5 million, court records show.

Ven-A-Care has settled more than two dozen lawsuits since 2000 that allowed state and federal governments to collect more than about $3 billion. Ven-A-Care collected more than $400 million in whistle-blower fees during that period.

Ven-A-Care sued under the U.S. False Claims Act and a similar statute in California, which lets whistle-blowers sue on behalf of the government and share in any recovery. While the California attorney general joined the lawsuit, the U.S. Justice Department didn’t.

The U.S. will still share in the recovery in the lawsuit, which is part of the so-called average wholesale price litigation consolidated before U.S. District Judge Patti Saris in Boston. She must approve the settlement.

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