Drug Manufacturers to Pay $421 Million to Settle False Claims Act Cases

Abbott Laboratories, B. Braun Medical, and Roxane Laboratories have agreed to pay $421 million to settle False Claims Act allegations. The companies were accused by the U.S. government of engaging in a scheme to report false and inflated prices for numerous pharmaceutical products -- knowing that federal healthcare programs rely on reported prices to set payment rates.

The difference between a government payment and the actual price paid by healthcare providers for a drug is referred to as the “spread”; the larger the spread, the larger the profit. Abbott, Roxane and Braun, according to the Department of Justice, created artificially inflated spreads to market, promote and sell drugs.

The U.S. Department of Justice reports:

“These significant settlements are a part of the Attorney General’s aggressive effort to combat fraud on the federal treasury ... Cases alleging fraud or false claims against government health care programs are the largest portion of these recoveries”.

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