Schering-Plough Corp., Kenilworth, N.J., agreed to pay $346 million in fines and damages to settle charges that it overcharged for drugs sold through Medicaid, the company said. The pharmaceutical company said it would also plead guilty to a federal criminal charge concerning a payment to a managed care customer.
Federal law requires drugmakers to give their lowest prices to Medicaid, but a group of whistle-blowers accused Schering-Plough of giving some private healthcare providers better deals by offering them under-the-table "patient education" grants.
Federal prosecutors in Philadelphia began investigating the allegations in 1999 as part of a broad inquiry into pharmaceutical marketing practices.
Schering-Plough said that as part of the settlement it would pay a criminal fine of $52.5 million and civil damages of $293 million. Some of those damages, though, will be offset by credit the company will receive for $53.6 million in Medicaid rebates that it has previously paid.