General Gansler Announces Settlement with Aventis Pharmaceutical,
Agreement Settles Allegations of Misreporting Prices to Medicaid
MD ( November 20, 2009) - Attorney General Douglas
F. Gansler today announced that Maryland will receive $321,172.80
as part of a $95.5 million global settlement with Aventis Pharmaceutical,
Inc, a wholly-owned subsidiary of Sanofi-Aventis U.S., LLC.
The Maryland settlement agreement resolves allegations that
between 1995 and 2000, Aventis and its corporate predecessors
knowingly misreported best prices for the steroid-based anti-inflammatory
nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the
Medicaid Drug Rebate Statute, Aventis was required to report
to Medicaid the lowest, or “best” price that it
charged commercial customers, and pay quarterly rebates to
the Medicaid program based on those reported “best” prices.
Aventis entered into “private label” agreements with
Kaiser Permanente, a large health maintenance organization (HMO),
to avoid reporting the best price for Azmacort, Nasacort and Nasacort
AQ that would have obligated it to pay millions of dollars of drug
rebates to Medicaid. Aventis repackaged its drugs under Kaiser’s “private
label,” resulting in the underpayment of drug rebates to
the Medicaid program and to several other federal health programs.
“This is a significant recovery for our Medicaid program,” said
Attorney General Gansler. “Aventis underpaid its rebates
and overcharged the states for these products. This conduct will
not be tolerated, and we will vigilantly enforce the law to maintain
the integrity of our Medicaid program.”
State Medicaid programs across the country will receive over $40
million of the settlement. The federal portion of Medicaid recovery
is approximately $49 million with an additional $6.5 million for
certain public health service entities who also paid inflated prices
for the drugs at issue.
Aventis Pharmaceutical’s parent company, Sanofi-Aventis,
entered into an Addendum to a Corporate Integrity Agreement with
the Office of Inspector General of the Department of Health and
Human Services. Under the Addendum, Sanofi-Aventis is required
to report certain best price information for drugs covered by Medicaid
and other health care programs. The company was already under a
corporate integrity agreement requiring it to report other pricing
information to the government as a result of a prior drug pricing
settlement concerning the company’s drug Anzemet.
The National Association of Medicaid Fraud Control Units (NAMFCU)
conducted the settlement negotiations on behalf of the states,
with representatives of the Massachusetts, District of Columbia
and Nebraska Medicaid Fraud Control Units leading the effort.