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MADISON - Wisconsin's Medicaid Program will be compensated for Purdue Pharmaceuticals' fraudulent practices relating to the sale of OxyContin, Attorney General J.B. Van Hollen announced today. The payment is part of a settlement agreement the Wisconsin Department of Justice (DOJ) and the Wisconsin Department of Health and Family Services (DHFS) have reached with The Purdue Frederick Company, Inc., a New York corporation, and Purdue Pharma, L.P., a Delaware limited partnership (collectively "Purdue"). The settlement resolves claims that Purdue marketed OxyContin as less subject to abuse, illicit use and diversion and as less addictive and less likely to cause tolerance and withdrawal than other pain medications; and that the companies knew that these marketing claims were false and misleading, causing damage to the Medicaid program.
"It is illegal to make fraudulent misrepresentations about a product in connection with its sale to the Wisconsin Medicaid Program," Van Hollen said. "Through the Wisconsin Department of Justice's Medicaid Fraud Control Unit, my office will vigorously enforce Wisconsin law that prohibits fraudulent practices in connection with medical assistance programs."
Earlier this year, The Purdue Frederick Company and its top three executives plead guilty in the United States District Court for the Western District of Virginia to charges of knowingly and fraudulently misbranding OxyContin as being less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal problems than other pain medications. The pleas were the result of a four-year investigation spearheaded by the United States Attorney's Office for the Western District of Virginia in conjunction with other state and federal law enforcement agencies. That investigation also led to the settlement agreement announced today, in which Purdue has agreed to pay $160 million to the federal government and state Medicaid programs to compensate the Medicaid programs for damages caused by the misbranding of OxyContin from 1995 through 2005.
Under the terms of WisconsinвЂ˜s settlement, the state of Wisconsin will recover $4,527,946 on behalf of the Wisconsin Medicaid program; $2,023,962 of that amount has been paid directly to Wisconsin, with the balance going to the federal government to reimburse its share of the Medicaid costs.
The settlements with Purdue will further require the company to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services in order to monitor the company's operations and ensure future compliance with all laws and regulations.
The National Association of Medicaid Fraud Control Units' state settlement team was instrumental in the settlement process and was led by the Directors of the New York, New Hampshire, Virginia, and North Carolina Medicaid Fraud Control Units.
In May of this year, the Wisconsin Department of Justice, representing the state and acting on behalf of affected consumers, entered into a civil settlement with Purdue Pharmaceutical to resolve alleged violations of the state's consumer protection laws.
OxyContin is an extended-release form of Oxycodone.