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Attorney General's News Release

October 19, 2009

AG Koster announces $2.5 million Medicaid fraud settlement for Missouri

--four pharmaceutical companies settle accusation of submitting false claims--

Jefferson City, Mo. -- Attorney General Chris Koster announced today that Missouri will receive $2.5 million as part of a nationwide settlement with four pharmaceutical companies accused of violating the False Claims Act by failing to pay appropriate rebates for drugs that were paid for by Medicaid. This recovery adds to Missouri's record-breaking year for Medicaid fraud recovery. The Attorney General's Medicaid fraud unit has collected more than $77 million since January 1, 2009, on behalf of Missouri's Medicaid system.

Koster said the agreement is with Mylan Pharmaceuticals, Inc. ("MPI"), UDL Laboratories, Inc. (UDL), AstraZeneca Pharmaceuticals LP, and Ortho McNeil Pharmaceutical, Inc. The companies are participants in the Medicaid Rebate Program. As part of the program, the companies pay quarterly rebates to Medicaid based upon the amount of money that Medicaid paid for each company's drugs. The precise amount of a rebate is determined in part by whether a drug is considered an "innovator" drug or a "non-innovator" drug. The rebate that must be paid for innovator drugs is higher than the rebate for non-innovator drugs.

The settlement resolves allegations that the companies sold innovator drugs that were manufactured by other companies and had classified those drugs as non-innovator drugs for Medicaid rebate purposes. As a result of the improper classification, the companies underpaid their rebate obligations to the Medicaid program.

"Medicaid fraud costs the state of Missouri tens of millions of dollars each year," Koster said. "My office will continue to make discovering, investigating and prosecuting Medicaid fraud one of our highest priorities."

The total amount the companies will pay the states and the federal government is $124 million.

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