Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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OREGON ATTORNEY GENERAL ANNOUNCES $95.5 MILLION SETTLEMENT OVER DRUG PRICING SCAM

December 1, 2009

Agreement resolves allegations that Aventis Pharmaceutical, Inc. used deceptive packaging to defraud Medicaid

Attorney General John Kroger today announced that Oregon will recover $699,106 as part of a national Medicaid fraud settlement with Aventis Pharmaceutical, Inc., over claims that the company misreported corporate sales pricing to avoid paying rebates.

"Fraud is an enormous problem in the U.S. health care system," said Attorney General Kroger, "This settlement will pay for health care for hundreds of Oregonians who desperately need it."

Oregon's share is part of a $95.5 million national civil settlement involving allegations that, between the years of 1995 and 2000, Aventis, a wholly owned subsidiary of Sanofi-aventis U.S. LLC, misreported its "best prices" for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ.

Under federal law, pharmaceutical companies are required to report to Medicaid the lowest or "best" price charged to commercial customers and pay quarterly rebates to the State Medicaid Program based on that price. Instead, Aventis is alleged to have entered into "private label" agreements with Kaiser Permanente, a large health maintenance organization (HMO). Aventis sold the drugs to Kaiser at a discount, but first repackaged the drugs with Kaiser-specific labels to omit reporting discounts that would have obligated the company to pay millions to Medicaid.

The Oregon Department of Justice is a national leader in the fight against health care fraud. Since Attorney General Kroger took office last January, the Department of Justice has recovered nearly $20 million from pharmaceutical companies that defrauded Oregon consumers and the state Medicaid program.

The Aventis case was handled by Senior Assistant Attorney General Rodney Hopkinson, director of the Oregon Department of Justice Medicaid Fraud Unit. In addition to recovering money for the Oregon Health Plan, the Medicaid Fraud Unit investigates and prosecutes billing fraud, physical and financial abuse in Medicaid-funded facilities and fraud committed by Medicaid program employees.

Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, and defend the rights of all Oregonians.

Contact:

Tony Green, (503) 378-6002 tony.green@doj.state.or.us |
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