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MADISON - The Wisconsin Department of Justice has received $3,464,092 as part of settlements from the drug manufacturer Merck, Attorney General Van Hollen announced today. The money is part of a comprehensive settlement agreement Wisconsin, 48 other states, the District of Columbia, and the federal government reached with Merck to resolve allegations that the company failed to pay required rebates due to the Medicaid program on the sale of the drugs Zocor, Vioxx and Pepcid. Over $2.8 million of the payment is for restitution that will be returned to the state's Medicaid program.


"Pharmaceutical companies must provide state Medicaid programs with the best price for their product," said Van Hollen. "In the interest of enforcing the law and protecting taxpayer dollars, my office will take action to ensure that state taxpayers are only paying what they should and that the state Medicaid program is made whole when a company fails to provide the rebates it is required to provide."


Pharmaceutical manufacturers that supply products to Medicaid recipients are required by the federal Medicaid drug rebate law to give the Medicaid programs the benefit of the "best price" available for those products. The manufacturers are required to file "best price" information with the Centers for Medicare and Medicaid Services (CMS). This information is then used to calculate rebates to be paid by these manufacturers to the state Medicaid programs. In general, the lower the "best price," the higher the rebate obligation.


Claims filed by whistleblowers in federal courts in Pennsylvania, Louisiana, and Nevada contended that Merck failed to report discounts in their "best price" reports, resulting in less rebates paid to the state Medicaid programs. The comprehensive settlement resolves those and other potential similar claims.


In addition to the monetary recovery, Merck has entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services' Inspector General. The Corporate Integrity Agreement will include provisions that will ensure that Merck will market, sell, and promote its products in accordance with all federal health care program requirements. Merck began compliance initiatives associated with their sales and marketing activities prior to learning of the government's investigation into the conduct associated with these settlements.


The National Association of Medicaid Fraud Control Units conducted the settlement negotiations on behalf of the states, with representatives from the Medicaid Fraud Control Units of Nevada, Delaware, Illinois, and Massachusetts leading the negotiations.


The Wisconsin Medicaid Fraud Control Unit is housed in the Wisconsin Department of Justice. The Unit investigates and prosecutes crimes committed against vulnerable adults in nursing homes and other facilities, as well as fraud perpetrated by providers against the Wisconsin Medicaid program.