The vaccine division of drugmaker Sanofi has agreed to pay $19.8 million to settle allegations it overcharged the U.S. Department of Veterans Affairs for certain drugs.
Sanofi Pasteur incorrectly billed the Veterans Affairs department from 2002 to 2011 after it mistakenly calculated the federal ceiling price for covered drugs, according to the Department of Justice. Under the Veterans Health Care Act, drugmakers can't charge the VA more than the maximum amount, or ceiling price, for drugs.
Sanofi Pasteur voluntarily disclosed the error to the VA in 2012 after discovering that the calculation errors caused overcharges from 2007 to 2012. A subsequent investigation by the VA's Office of Inspector General found the overcharges went as far back as 2002.
In a statement, Sanofi Pasteur said it had cooperated fully with the government investigation and "negotiated in good faith" after the disclosure.
"The company is committed to honoring its obligations under the Federal Supply Schedule contract," the company said.
Sanofi Pasteur has also agreed not to pursue reimbursement claims for sales where the miscalculations led to the company charging VA a lower price, the U.S. Justice Department said.