CURRAN ADDS $588,989 TO THE STATE MEDICAID PROGRAM

Maryland Attorney General J. Joseph Curran, Jr. announced today that the State Medicaid Program received a settlement check in the amount of $588,989 as a result of a November, 2005 agreement with King Pharmaceuticals, Inc.. King incorrectly reported prices to the government for several of its drugs and as a result, paid millions of dollars less in rebates to government entities, including State Medicaid programs. King will pay $124 million in settlements with forty-nine states and the federal government. The National Association of Medicaid Fraud Control Units (NAMFCU) negotiated the State settlement.

King, a Tennessee-headquartered manufacturer of generic drugs, entered into civil agreements to address allegations that, from 1994 through 2002, it had not accurately calculated drug prices reported to the federal government for the purpose of establishing rebates due to State Medicaid programs under the federal Medicaid drug rebate statute. As a result of these incorrect price calculations, Medicaid and other programs that were due rebates from King were underpaid some $62 million nationwide. The settlements include a double damages penalty, resulting in the total settlement figure of $124 million.

As part of the settlement, the State of Maryland recovered $902,573 for the Maryland Medicaid Program; $335,140 of that amount was paid directly to Maryland and $313,585 was paid to the federal government to reimburse its share of the Medicaid costs. King also paid $240,801 to Maryland for losses to the Maryland Pharmacy Assistance Program and $13,048 in interest. The Maryland Medicaid program is jointly funded by the State and the federal government. The Maryland Pharmacy Assistance Program is funded totally by the State.

The civil settlements with King further require the company to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, in order to monitor the company’s operations and ensure compliance with the law in the future.