- According to MA-based Attorney General Maura Healy, AstraZeneca (AZ) and Cephalon (a division of Teva) violated the False Claims Act provision of the Medicaid Drug Rebate Program. As a result, Healy and attorneys general of several other states sued AZ and Cephalon, and have now come to a settlement involving the affected states and the several government.
- Specifically, the suit claimed that AZ and Cephalon falsely treated certain fees paid to wholesalers as "discounts." This resulted in improperly lowering the average prices reported.
- This is important, because state programs depend on rebates from pharmaceutical companies to bring down their overall spend.
This lawsuit falls under the rubric of increased government scrutiny of drug-pricing practices. AZ and Cephalon have been accused of breaking a key provision of the Medicaid Drug Rebate Program by misreporting actual rebates, thereby actually increasing the amount paid by the federal government and Massachusetts through its Medicaid and Medicare programs for drugs from AZ and Cephalon.
Of the total $54 billion settlement fee, AZ will pay $46.5 million to the federal government and states, and Cephalon will pay a total of $7.5 million.