Oklahoma is getting back $3.8 million in Medicaid fraud money recovered under a federal investigation into prescription drug prices, as several states begin to look more closely at how managed care administrators bill for pharmaceuticals.
Attorney General John O’Connor announced Tuesday Oklahoma has joined the other 49 states; Washington, D.C.; Puerto Rico; and the federal government in a $233.7 million settlement with Mallinckrodt ARD LLC, formerly known as Questcor Pharmaceuticals.
The company was found to have inflated prescription drug prices from 2013 to 2020 by circumventing Medicaid rules designed to curb steep price increases. If a manufacturer increases a drug’s price faster than the rate of inflation, Medicaid rules require the company to pay Medicaid a rebate for the amount of the increase that exceeds the rate of inflation.
Mallinckrodt avoided paying the rebate by treating its drug H.P. Acthar Gel as a new drug just approved by the U.S. Food and Drug Administration, though it had been first introduced in 1952. As a new drug, the price could not be compared against that of previous years to show how much and how quickly the price of the drug had been increased.
The settlement resolves allegations that Mallinckrodt knowingly underpaid Medicaid rebates.