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For Immediate Release:  
For Further Information:
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August 29, 2006  
Peter Aseltine
609-292-4791

Office of The Attorney General
- Zulima V. Farber, Attorney General
Division of Criminal Justice
- Gregory A. Paw, Director
Office of the Insurance Fraud Prosecutor
-
Greta Gooden Brown, Insurance Fraud Prosecutor

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New Jersey to Receive Nearly $2 Million in Medicaid Fraud Settlement with Schering-Plough

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TRENTON - Attorney General Zulima V. Farber announced that New Jersey’s Medicaid program will receive almost $2 million as a result of a national settlement which requires Schering-Plough Corp. to pay over $203 million in civil damages and penalties to the federal government and state Medicaid programs across the country.

As part of the settlement, which is subject to court approval, New Jersey’s Medicaid program will be reimbursed approximately $3.5 million to be split by the state and federal government, with the state receiving $1,967,790.

“This settlement returns a sizable amount of money to the State of New Jersey and to the Medicaid program, which assists and benefits those citizens who need the aid the most,” said Attorney General Farber. “We have dedicated significant resources to investigating and prosecuting Medicaid fraud in New Jersey.”

“Every dollar lost to fraud or abuse is one less dollar available to help the most needy citizens of our state,” said Insurance Fraud Prosecutor Greta Gooden Brown. “The Office of the Insurance Fraud Prosecutor is committed to fighting healthcare fraud and returning much needed dollars to victims of insurance fraud including Medicaid, insurance companies and taxpayers.”

According to Division of Criminal Justice Director Gregory A. Paw and Insurance Fraud Prosecutor Brown, the Medicaid Fraud Control Unit of the Office of the Insurance Fraud Prosecutor participated in a national investigation as well as the negotiations with Schering-Plough.

OIFP’s Medicaid Fraud Control Unit routinely participates in national settlements with the Department of Justice through the National Association of Medicaid Fraud Control Units (NAMFCU).

Following the filing of a federal false claims action, NAMFCU’s investigation revealed that Schering-Plough concealed its “best price” for purposes of rebating the Medicaid program for certain drugs. These drugs included an allergy medication known as Claritin; a potassium supplement known as K-Dur; and a drug used in connection with the treatment of brain cancer known as Temodar. The investigation also revealed that Schering Plough allegedly paid kickbacks to doctors in connection with prescribing Intron-A, PEG-Intron, and Rebetron which were used to treat hepatitis infections.

As the result of NAMFCU’s negotiation, Schering-Plough agreed to pay $203 million dollars to settle these allegations. The total settlement also includes payment of a $180 million criminal fine to the federal government by a subsidiary of Schering-Plough, as well as roughly $50 million in payments not related to Medicaid.

As the result of OIFP’s Medicaid Fraud Control Unit participating in the investigation and negotiations, the New Jersey and federal share of the settlement in connection with payments made by the New Jersey Medicaid program will amount to $3,535,903.

The Medicaid program, which is funded by the state and federal governments, provides health care services and prescription drugs to persons who may not otherwise be able to afford such services and medicines. The State of New Jersey administers the Medicaid program through the Division of Medical Assistance and Health Services. The Office of the Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit investigates both criminal and civil Medicaid fraud and abuse in that program.

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