Drug companies agree to $421 million settlement

Pharmaceutical companies Abbott Laboratories, B. Braun Medical, and Roxane Laboratories have agreed to pay the federal government a total of $421 million to settle False Claims Act allegations, the Justice Department's Civil Division announced Tuesday at a news conference.

The settlements resolve U.S. claims that the companies engaged in what Assistant Attorney General Tony West referred to as a “complicated and complex” scheme to report false prices for pharmaceutical products. Federal healthcare programs use those prices to set payment rates, and the actual sales prices for the products were less than what the defendants reported, according to the Justice Department.

Roxane had the highest settlement, as the company agreed to pay $280 million to resolve claims against the company and its entities. Abbott will pay $126.5 million to settle two qui tam cases, and B. Braun Medical, a U.S. subsidiary of B. Braun Melsungen AG, a German pharmaceutical company, will pay $14.7 million to resolve allegations that it caused the Medicaid program to pay inflated amounts for 49 of its drug products.

Florida home infusion company Ven-A-Care, the whistle-blower that brought about the allegations, will receive about $88.4 million from the settlements. Since January 2009, the Civil Division and U.S. attorneys nationwide have recovered more than $9 billion in cases alleging false claims, fraud against the government, and violations of the Food, Drug and Cosmetic Act.