Organon USA to Pay $31 Million for Fraudulent Medicaid Billing

Drug manufacturer also illegally promoted antidepressants, offered kickbacks

BALTIMORE (October 20, 2014) - Attorney General Douglas F. Gansler announced today that Maryland, along with other states and the federal government, has secured a $31 million national settlement with Organon USA, Inc., resolving allegations that the drug manufacturer underpaid rebates to Maryland’s Medical Assistance Program, offered improper financial incentives to nursing home pharmacy companies, promoted its antidepressants for unapproved uses and misrepresented its drug prices to Maryland’s Medical Assistance Program. Maryland’s share of the settlement is $392,097.78, a portion of which will be shared with the federal government, which provides funding for the Maryland Medicaid Program.

“This money belongs to the citizens of Maryland and can be used to provide health care to those in need,” said Attorney General Gansler. “This drug manufacturer put profit above customer care when it offered kickbacks to nursing home pharmacy companies that plugged the unapproved use of its products.”

The settlement agreement resulted from two whistleblower lawsuits, one filed in the United States District Court for the District of Massachusetts and the other filed in the United States District Court for the Southern District of Texas. The agreement settles allegations that Organon USA did not include rebates and discounts in its best price reporting and therefore underpaid rebates owed to the Maryland Medical Assistance Program. The federal Medicaid Drug Rebate Program requires that all drug manufacturers which supply products to Medicaid recipients provide the Medicaid programs the benefit of the “best price” available for that product. Additionally, Organon USA offered nursing home pharmacy companies market share discounts and rebates to encourage the use of Remeron and Remeron SolTab for conditions that were not approved as safe and effective by the Food and Drug Administration. Organon USA also reported false and inflated prices to Maryland’s Medical Assistance Program and then offered the drugs at a lower cost as a financial inducement to nursing home pharmacies.

A National Association of Medical Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Organon USA on behalf of the states. In making the announcement, Attorney General Gansler thanked Assistant Attorney General Jennifer S. Forsythe and Chief Auditor Ruth Jarrell for their work on this case.

Source: Office of Attorney General Douglas F. Gansler

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