Sanofi pays $20M bill to resolve claims of overcharging
- After a voluntary report of miscalculations, Sanofi Pasteur, the vaccines division of Sanofi, agreed to pay $19.87 million to resolve claims it overcharged the Department of Veterans Affairs between 2002 and 2011 under the Federal Ceiling Price legislation.
- The company has also agreed not to seek compensation for any underpayments under the same rules.
- Sanofi Pasteur stated it has "cooperated fully and negotiated in good faith with the government since its voluntary disclosure," and is "committed to honoring its obligations under the Federal Supply Schedule (FSS) contract."
Companies that supply the Department of Veterans Affairs (VA) must commit to charging no more than Federal Ceiling Price (FCP) for drugs.
"It is important that pharmaceutical companies provide complete, accurate, and current information to the VA about the pricing of their drugs," said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. "The Department of Justice will ensure that pharmaceutical companies follow the rules for drug pricing when selling to the government."
After Sanofi Pasteur approached the VA to say that it had miscalculated the FCP for some drugs between 2007 and 2011, the VA carried out its own investigation and found that the miscalculation actually extended back to 2002.
"Overcharging VA depletes funds that are available to care for our veterans," said Director of the Healthcare Resources Division Mark Myers of Veterans Affairs, Office of Inspector General. "We will continue to hold companies accountable for errors in drug pricing."
"The final civil settlement with the U.S. Department of Justice and VA resolves potential civil claims," Sanofi Pasteur said in an emailed response to questions.
"At all times, Sanofi Pasteur has cooperated fully and negotiated in good faith with the government since its voluntary disclosure in 2012 of the calculation and reporting error, and the company is committed to honoring its obligations under the Federal Supply Schedule (FSS) contract. The parties agreed to the settlement to avoid delay, inconvenience and expenses of protracted litigation of the claims."
Sanofi Pasteur isn't the first company caught overcharging the VA, though many of the cases on record have been for medical devices and other healthcare products. Back in 2012, St. Jude Medical paid out $3.65 million to resolve allegations over cost inflation of pacemakers and defibrillators.
And in 2014, Stryker and Alliant Enterprises had to pony up $1.05 million over medical products after failing to disclose complete pricing information. In yet another example, Siemens Medical Solutions paid $5.9 million in 2015 to resolve an investigation into overcharging for medical imaging equipment between 2002 and 2008.
- Department of Justice Statement
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