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Misreporting Prices for Nasal Sprays
Date: 05/28/2009 (Date of Announcement)
Misconduct Type: Government Contract Fraud
Enforcement Agency: Health and Human Servs.
Contracting Party: None
Court Type: Civil
Synopsis: Aventis Pharmaceutical Inc., a subsidiary of Sanofi-Aventis U.S. LLC, agreed to pay the United States $95.5 million to settle allegations that it violated the False Claims Act by misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations. The government alleged that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for its steroid-based, anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. The Medicaid Drug Rebate Statute requires drug manufacturers to report to Medicaid the lowest, or "best," price that it charges commercial customers and pay quarterly rebates to the states based on those reported prices. It was alleged that, in order to avoid triggering a new best price that would obligate it to pay millions of dollars in additional rebates to Medicaid, Aventis entered into "private label" agreements with Kaiser Permanente that repackaged Aventis’s drugs under a new label.