Georgia Eyes 1% of $31M Organon Settlement

ATLANTA (CN) - Georgia will participate in a multistate and federal settlement with drugmaker Organon related to two federal whistleblower lawsuits.

Organon, a Netherlands-based company owned by Merck, stood accused of underpaying state Medicaid programs, offering improper financial incentives to pharmacies, promoting its anti-depressants for unapproved uses and misrepresenting drug prices to Medicaid programs.

"There are already too many excess prescription drugs in our communities," Attorney General Sam Olens said in a statement on the Oct. 28 settlement. "Promoting drugs for uses that are not approved by the FDA is unacceptable and only adds to the prescription drug abuse problem we face."

Of the $31 million that Organon must pay in the federal settlement, Georgia will receive more than $413,000 in restitution and recoveries.

The settlement arising from federal lawsuits filed in Massachusetts and Texas resolves separate allegations regarding underpaid rebates, kickbacks, off-label promotions and pricing misinterpretations.

In addition to claims that it withheld from Medicaid programs the "best price" available for its products, Organon allegedly violated Medicaid Drug Rebate Program rules.

By offering discounts and rebates to encourage the use of its products, resulting in the submission of false claims to state Medicaid programs, the drug manufacturer of additionally violated the federal Anti-Kickback Statute, according to the complaint.

As for off-label promotions, the govnerment said Organon marketed drug side effects as possible benefits and promoted the use of certain anti-depressants in children and adolescents.

Lastly, Organon was accused of reporting false and inflated pricing before offering drugs at a lower cost to nursing-home pharmacy companies, which increased the Medicaid reimbursement to those companies.

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