GlaxoSmithKline will pay $150 million to settle claims it overcharged Medicare and Medicaid for two drugs typically used in doctors' offices and hospitals to counter nausea brought on by chemotherapy and radiation.
According to the Justice Department, the company engaged in a scheme to inflate prescriptions of Zofran and Kytril by charging providers less for the anti-nausea drugs than the reported manufacturer's price.
Medicare and Medicaid reimburse providers for drugs based on manufacturer's price.
The government alleged GlaxoSmithKline knew providers would get to pocket the difference and, as a result, would be more likely to prescribe the drugs again.
The company did not admit wrongdoing as part of the settlement.
"We believe that our price reporting was lawful and was done in good faith, but we've agreed to this settlement to avoid the delay, expense and uncertainty of litigation," a company spokeswoman said.
The settlement covers claims submitted from 1994 to 2002.