Attorney General's News Release

February 5, 2007

Nixon presents check for $3.1 million to Department of Social Services in major Medicaid fraud settlement

Jefferson City, Mo. — Attorney General Jay Nixon announced today that he has presented a check for $3,161,162 to the Missouri Department of Social Services from a settlement with pharmaceutical giant Schering-Plough. The compensation to the Missouri Medicaid program is part of a nationwide Medicaid fraud settlement, Nixon said. Schering-Plough is the manufacturer of the popular anti-allergy medication Claritin as well as several other prescription drugs.

Nixon says the settlement resolves allegations that the Delaware-based company's marketing and distribution practices of Claritin and other drugs resulted in the Medicaid program paying too much in reimbursement in some cases and not receiving the full amount of rebates due in other cases.

"Our aggressive pursuit of those who commit Medicaid fraud has resulted in the return of millions of dollars to Missouri taxpayers," Nixon said. "It is taxpayers who ultimately get socked due to Medicaid fraud, so we will always be committed to holding those who defraud the system accountable."

Missouri's participation in the settlement resulted in more than $7.3 million going back to taxpayers, Nixon said. More than $3.1 million of that amount reimbursed the Missouri Medicaid program, and the balance went to the federal government for its share of the Medicaid costs. All told, $91,602,000 is being paid to the states.

The settlement involving the Medicaid fraud control units of Missouri and the other states, the U.S. Attorney's Office for the District of Massachusetts, several other federal agencies and Schering-Plough was approved by the U.S. District Court in Boston. The total recovery for the federal and state governments under the civil settlements is $255 million.

The settlement resolves allegations that Schering-Plough misreported prices to the Health Care Financing Administration (HCFA) for the allergy medication Claritin RediTabs and for K-Dur, which is used to treat stomach conditions. The misreported prices meant the Medicaid programs were underpaid millions of dollars in rebates.

The state and federal governments also alleged that Schering-Plough engaged in kickbacks to physicians through marketing programs to induce them to prescribe certain of the company's drugs. The allegations also included concerns that Schering-Plough promoted "off-label", or non-FDA approved, uses of other drugs in order to increase prescriptions of those drugs.

Under the settlement, Schering-Plough must monitor and correct the shortcomings in its drug sales, marketing and printing activities.

The Medicaid Fraud Control Unit of the Attorney General's Office, established by Nixon in 1994, has authority under state law to investigate and prosecute, both civilly and criminally, allegations of fraud against Missouri's Medicaid Program. In 2006, the unit recovered more than $8.6 million for taxpayers in Medicaid fraud cases.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818