(CN) – Aventis Pharmaceutical agreed to pay $95.5 million to settle charges that it misreported drug prices to reduce its Medicaid Drug Rebate obligations by millions of dollars. The settlement involves steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ.
Between 1995 and 2000, Aventis and its corporate predecessors entered into “private label” agreements with HMO Kaiser Permanente that repackaged Aventis’ drugs under a new label, avoiding reporting a new best price that would have cost the company millions in rebates, the Justice Department said.
Aventis, like all drug makers, was required to report to Medicaid the lowest, or best, prices charged to commercial customers and to pay quarterly rebates to states based on those prices.
The federal government will recover about $49 million from the settlement, states will get about $40 million and public health organizations that paid inflated prices for the drugs will get about $6 million.
As part of the settlement, Sanofi-Aventis board members will be made personally responsible for the effectiveness of the company’s compliance Medicaid laws.