CURRAN SETTLES WITH DRUG MAKER GLAXO SMITHKLINE IN $149 MILLION NATIONAL SETTLEMENT

Maryland Attorney General J. Joseph Curran Jr., today announced his office has reached a settlement with pharmaceutical giant Glaxo SmithKline to resolve allegations that it improperly inflated the “average whole sale price” paid by government health plans for certain of its prescription drugs. The settlement, in conjunction with an earlier Federal Settlement and corresponding agreements in 37 other states resulted in Glaxo’s agreement to repay $126 million to Medicare and $23 million to Medicaid of which $466,756 will be paid to Maryland’s Medicaid Program.

The conduct at issue concerned Glaxo’s reporting of bench mark pricing data that was used by Medicare and Medicaid to set reimbursement amounts for its drugs Kytril and Zofran, injectible anti nausea drugs used in connection with chemotherapy. According to the government allegations, Glaxo had increased the reported prices for these products to create a “spread” between what purchasers actually paid and what Federal and State health program would pay. This “spread ” could then be offered as an inducement to positions or other drug purchasers to choose Glaxo products.

As part of the settlement, Glaxo will be required to report to the Maryland Medicaid Program two certified and federally defined prices that are currently used in connection with the Medicaid rebate program and Medicare part B reimbursement. Such prices were not previously available to the State which can now use them to evaluate what it is paying for drugs and to determine if alternative reimbursement methodologies are necessary. Glaxo must also enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, and submit to monitoring of the companies compliance with law in the future.

This case was handled by the Medicaid Fraud Control Unit within the Attorney General's Office.