Washington State is scheduled to receive a substantial settlement as part of the resolution of an investigation into an alleged scheme of four pharmaceutical companies to defraud Medicaid by classifying their prescription drugs so as to reduce the amount the companies owed to Medicaid in regular rebate payments. The pharmaceutical companies involved include UDL Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ortho McNeil Pharmaceutical, Inc., and AstraZeneca Pharmaceuticals LP. Drug makers that supply products to Medicaid patients are required under the Federal Medicaid Drug Rebate law to rebate both the federal and state governments with a designated portion of revenues from Medicaid sales. The four companies under investigation were alleged to have violated the False Claims Act by classifying their drugs in a way that quarterly rebate amounts were reduced, thus maximizing profits with both the state and federal health care programs.

For the full story, go to the Department of Justice’s press release.