United States v. AstraZeneca Pharmaceuticals, LP

In October 2009, the United States, through the U.S. Attorney’s Office in New Hampshire, recovered $124 million from four drug companies – Mylan Pharmaceuticals Inc., AstraZeneca Pharmaceuticals LP, UDL Laboratories Inc. and Ortho McNeil Pharmaceutical Inc. – for underpaying Medicaid, the joint federal-state program which provides prescription drug coverage to the poor and disabled. The settlement with Mylan and UDL in particular ($118 million combined) represents the largest health care fraud recovery that the U.S. Attorney’s Office in New Hampshire has ever obtained.

The settlement resolves a qui tam case originally filed by a whistleblower represented by Berger Montague The whistleblower will receive over $10 million for bringing the fraud to the attention of the government.

The whistleblower originally filed a complaint in 2006 detailing how Mylan, AstraZeneca, UDL and Ortho McNeil underpaid rebates owed to Medicaid on the sale of certain drugs. In order for a pharmaceutical company’s drugs to be available to Medicaid recipients, the company must agree to pay quarterly rebates to Medicaid to ensure that Medicaid receives the same low prices as large, commercial customers. The amount of the rebate is determined in part by whether the drug is considered an “innovator” or “non-innovator” drug. The defendant drug companies had sold innovator drugs, but had classified those drugs as non-innovators for purposes of calculating rebates to Medicaid. As a result of the improper classification of certain drugs, defendants underpaid its rebates owed to Medicaid.