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Zoeller: Indiana to get $6.3 million in drug-maker settlement

July 3, 2012

Indiana will receive more than $6.3 million as part of a national Medicaid fraud settlement with drug-maker GlaxoSmithKline, Attorney General Greg Zoeller said in a statement Monday.

The $2 billion national settlement is the largest recovery in a healthcare fraud investigation in U.S. history, according to the AG’s office. The civil settlement stems from allegations that GSK wrongly billed the state’s Medicaid program for ineligible claims and for illegal drug marketing practices brought to light by four whistle-blower lawsuits filed under the False Claims Act.

Zoeller said the settlement “sends a powerful message that state governments and our federal partners will not tolerate overbilling and wrongful billing of Medicaid.”

In addition to the civil settlement, GSK agreed to plead guilty and pay a $1 billion fine to settle federal criminal charges that it violated the federal Food, Drug, and Cosmetic Act. The charges alleged GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning they contained labels not in accordance with their Food and Drug Administration approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA, the AG’s office said.

The whistle-blower suits that resulted in the civil settlement alleged GSK illegally used “off-label” marketing of its antidepressants Paxil and Wellbutrin, the respiratory drug Advair, the anti-seizure drug Lamictal and the anti-nausea drug Zofran to induce physicians to prescribe them for uses not approved by the FDA, according to the AG’s office.

The suits also alleged GSK offered illegal kickbacks for promoting and prescribing those drugs as well as four other GSK products – Imitrex, Lotronex, Flovent and Valtrex.

The settlement also resolves allegations that GSK failed to comply with federal “best price” requirements for drug reimbursements by underpaying rebates to state Medicaid programs, according to the AG’s office. GSK agreed to pay $300 million in the national settlement, from which Indiana Medicaid will receive $1.22 million.

Money the state recovers through the civil settlement will go back into the Indiana Medicaid program and pay for investigations of other providers. Zoeller said whistle-blowers are entitled to about $245,000 of Indiana’s portion of the recovery and a portion of the national award not yet calculated.

 

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