Ohio A.G. Secures Approximately $7.2 Million for Buckeye State in Claritin Medicaid Fraud Settlement

Ohio Attorney General Jim Petro announced that his office has secured nearly $7.2 million for Ohio in a national settlement with pharmaceutical manufacturer Schering Plough. The settlement results from the drug company’s reported failure to fully reimburse the state’s Medicaid program for rebates on Claritin, a popular allergy medication.

“Medicaid expenditures on prescription drugs have a tremendous impact on the state’s budget,” Petro said. “It is imperative that we monitor drug-pricing activity and enforce the law to ensure Ohioans are getting the best deal for their tax dollars.”

Federal law requires pharmaceutical manufacturers to give the Medicaid program the best price available for a specific drug, taking into account any rebates, incentives or other deals provided to non-Medicaid customers.

In this case, Schering Plough reportedly failed to factor discounts it had provided to two HMOs when it reported Claritin’s best price to the Centers for Medicare and Medicaid Services. As a result, states throughout the country received millions less in rebates that should have been paid by the drug manufacturer from 1998 through 2002.

Petro’s office was part of the four-state team that led settlement negotiations on behalf of the National Association of Medicaid Fraud Control Units. As a result of the settlement, Schering Plough agreed to pay nearly $140.8 million to Medicaid programs in 49 states and the District of Columbia. The states’ settlement was reached in conjunction with a federal settlement negotiated by the U.S. Attorney’s Office in Philadelphia. All totaled, the company will pay $282.3 million to state and federal governments to resolve its civil liability for underpaying Medicaid drug rebates.

The drug company has already submitted slightly more than $1.4 million in restitution to Ohio’s Medicaid program. Ohio’s remaining settlement balance of nearly $5.8 million will be distributed to the state’s Medicaid program and will help fund ongoing Medicaid fraud investigations by Petro’s office.

As part of the settlement, Schering Plough also entered into a Corporate Integrity Agreement that will help ensure it does not continue this practice in the future.

Additionally, subsidiary Schering Sales Corp. will pay a fine of $52.5 million after pleading guilty to federal criminal anti-kickback charges.