Indiana recovers $1.8M in national settlement with drug manufacturer

Indiana Medicaid has recovered $1.8 million as part of a $75 million national civil settlement with New York-based pharmaceutical manufacturer Bristol-Myers Squibb Co., which allegedly overcharged Medicaid programs for drugs for almost a decade.

The state will receive $746,780 of the $1.8 million, with the federal government taking the rest of the money, according to the Office of Indiana Attorney General Todd Rokita. Across all divisions, the attorney general’s office has now recovered more than $198 million in 2021.

Allegations against Bristol-Myers Squibb emerged following an investigation prompted by a whistleblower action filed in 2013 in the U.S. District Court for the Eastern District of Pennsylvania under the Federal False Claims Act.

Bristol-Myers Squibb was accused of “misreporting sales figures and underpaying drug rebates owed to the states,” according to Rokita’s office, violating the Medicaid Drug Rebate program, which requires drug manufacturers to periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs. The alleged illegal activity took place from 2007 to 2016.

The rebate program is designed to ensure that states pay competitive prices for drugs, and the rebates for a manufacturer’s drugs are calculated based on a percentage of the average prices drug wholesalers pay for each of the drugs. Each manufacturer periodically calculates and reports this average price to the federal government. The greater the average price reported by the manufacturer, the greater the rebate the manufacturer must pay for that drug.

A National Association of Medicaid Fraud Controls Units team participated in the investigation and conducted settlement negotiations on behalf of the states.

States have agreed to dismiss any legal action against Bristol-Myers Squibb as part of the settlement.

“Hoosier taxpayers support the Medicaid program with faith that the funds are used to help provide the health care needs of people truly needing assistance,” Rokita said in a statement. “Whenever any company or individual overcharges or otherwise defrauds the program, we must ensure that penalties are imposed and restitution is made.”