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PHARMACEUTICAL COMPANY PAYS $42.5 MILLION TO RESOLVE FRAUD ALLEGATIONS
The National Association of Medicaid Fraud Control Units announced on March 16 that the states and the federal government have reached an agreement in principle with the pharmaceutical manufacturer, Alpharma Inc., to settle allegations of causing false or fraudulent claims for Kadian to be submitted to the Medicaid program.
Kadian is a sustained release morphine sulfate product indicated for the management of moderate to severe pain. Under the agreement, Alpharma agreed to pay the participating states and the United States $42.5 million, plus interest. The Medicaid programs nationwide will receive approximately $19.2 million of the total settlement.
It was alleged that during the period of January 1, 2000 through December 29, 2008, Alpharma offered and paid for training programs, consulting forums, research grants, speakers’ bureaus and made or disseminated false statements about the safety and efficacy of Kadian, all of which was done to induce health care providers to prescribe Kadian.
The investigation was initiated by a lawsuit filed under the qui tam provisions of the False Claims Act. This action is pending in the United States District Court for the District of Maryland.
A team representing the National Association of Medicaid Fraud Control Units participated in the investigation and conducted settlement negotiations with Alpharma on behalf of the states. Team members included representatives from South Carolina, Texas, Florida, Vermont and Arkansas.