State of California v. Schering-Plough Corporation
On December 17, 2009, Schering-Plough Corporation (now known as Merck & Co.) agreed to pay $21.3 million to settle qui tam allegations that it knowingly inflated the prices of its drugs, causing California’s Medicaid Program, Medi-Cal, to overpay millions of dollars in reimbursement.
The case alleged that Schering-Plough violated the California False Claims Act by reporting inflated prices for Albuterol, a widely prescribed generic drug used to treat asthma, and other drugs, knowing that Medi-Cal would base its provider reimbursement on those prices. At the time of the settlement, Attorney General Edmund G. Brown Jr. stated, “With healthcare costs spiraling out of control, it’s unconscionable that a Fortune 500 pharmaceutical company deliberately inflated its drug prices to cheat California’s public healthcare system out of millions of dollars.”
The settlement stemmed from a lawsuit filed by a whistleblower represented by Berger Montague’s Whistleblower / Qui Tam Group.