Schering-Plough settles federal probe
of unit for 345 million dollars
NEW YORK : Pharmaceutical giant Schering-Plough said it would pay a total of
US$345.5 million to settle a federal probe of its managed-care programs for government health care programs.
The company said its Schering Sales Corp. unit was to plead guilty to a single criminal charge regarding a payment to a managed-care customer, resulting from a probe conducted by the US prosecutors.
The agreement settles a five-year probe by federal prosecutors into the pharmaceutical firm's marketing practices for its Claritin allergy medication. Schering gave Cigna Corp. more than $10 million in kickbacks in order to keep its business after the health insurer said it would switch its patients to a lower-priced drug. At the same time, Schering continued to charge Medicaid a relatively high price for Claritin--violating the federal anti-kickback act, which requires drugmakers to offer Medicaid the lowest price on products. The settlement includes a criminal fine of $52.5 million and civil damages of $293 million.
The investigation was prompted by a whistle-blower lawsuit filed by three people who worked at a Schering-Plough subsidiary.
Schering-Plough will be credited with 53.6 million dollars previously paid in additional Medicaid program rebates against the damages, leaving it with net payments of 291.9 million.
Schering-Plough increased its litigation reserves by 350 million dollars in the third quarter of 2003.
Now,
keep up to date with daily feeds of newly posted stories about America's
Seniors...click on the box to the left