Indiana Attorney General Todd Rokita announced Wednesday that Indiana Medicaid has recovered $1.8 million as part of a $75 million national civil settlement resolving allegations that Bristol-Myers Squibb Co. overcharged state Medicaid programs for drugs.
Of the $1.8 million, $746,780 goes directly to the state, and the remainder goes to the U.S. federal government. The Medicaid program is administered jointly by the federal government and the individual states.
“Hoosier taxpayers support the Medicaid program with faith that the funds are used to help provide the health care needs of people truly needing assistance,” Rokita said. “Whenever any company or individual overcharges or otherwise defrauds the program, we must ensure that penalties are imposed and restitution is made.”
Bristol-Myers Squibb, a New York-based pharmaceutical manufacturer, settled with the states and the federal government following an investigation arising from a whistleblower action filed in the U.S. District Court for the Eastern District of Pennsylvania under the federal False Claims Act and various state false claims statutes.
Specifically, these settlements resolve allegations that Bristol-Myers Squibb misreported sales figures and underpaid drug rebates owed to the states. Under a federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs.
The rebate program is designed to ensure that states pay competitive prices for drugs, and the rebates for a manufacturer’s drugs are calculated based on a percentage of the average prices drug wholesalers pay for each of the drugs. Each manufacturer periodically calculates and reports this average price to the federal government. The greater the average price reported by the manufacturer, the greater the rebate the manufacturer must pay for that drug.