TRENTON
– Attorney General Paula T. Dow and
Criminal Justice Director Stephen J. Taylor
announced that New Jersey has received $1.3
million in a settlement with Aventis Pharmaceuticals
Inc. regarding “best price”
violations and resulting losses to New Jersey’s
Pharmaceutical Assistance to the Aged and
Disabled (PAAD) and Senior Gold (SG) Pharmaceutical
Assistance programs.
According
to Acting Insurance Fraud Prosecutor Riza
Dagli, the $1.3 million recovery for New
Jersey stems from the same allegations that
led to a separate settlement late last year
involving the Medicaid program, in which
New Jersey received $1,043,141 from Aventis.
The Medicaid settlement resolved allegations
that between 1995 and 2000 Aventis and its
corporate predecessors knowingly misrepresented
“best price” information for
the anti-inflammatory nasal sprays Azmacort,
Nascort and Nascort AQ.
New
Jersey and certain other states that were
part of that Medicaid settlement pursued
additional recoveries related to state-funded
pharmaceutical assistance programs that
were affected by the “best price”
violations. That resulted in New Jersey
receiving the new payment of $1,303,157
this week for the PAAD and SG programs.
Of that amount, $1,120,715 will go to the
PAAD program and $182,442 will go to the
SG program.
“We
are committed to rooting out Medicaid fraud
and fraud involving our state-funded pharmaceutical
assistance programs,” said Attorney
General Dow. “Every dollar that is
lost to fraud is one less dollar available
to purchase prescription medications for
needy individuals.”
Under
the Medicaid Drug Rebate statute, Aventis
was required to report to Medicaid the lowest,
or “best price” that it charged
commercial customers and pay quarterly rebates
to the Medicaid program based on those reported
“best prices.” State regulations
require that pharmaceutical manufacturers
enter into the same rebate agreement with
the state in order to participate in the
PAAD and SG programs. The PAAD and SG programs
are funded entirely through state funds,
while Medicaid is jointly funded by the
state and federal government.
The
“best price” violations involved
Aventis entering into a “private label”
agreement with Kaiser Permante, a large
health maintenance organization. Aventis
repackaged its drugs under Kaiser's private
label, and thereby avoided reporting the
lower price offered to Kaiser in its best
price calculation for Azmacort, Nascort
and Nascort AQ. This failure of reporting
the private label prices caused the Center
for Medicare and Medicaid Services to overestimate
Aventis’ “best price”
on the three drugs, resulting in the underpayment
of drug rebates to the Medicaid program
and state-funded pharmaceutical assistance
programs.
This settlement arose from False Claims
Act actions that were consolidated in the
U.S. District Court for the District of
Massachusetts. These cases, called qui tam
cases, were filed by private parties on
behalf of the government.
Attorney
General Dow noted that many cases now being
filed alleging Medicaid fraud are filed
under the New Jersey False Claims Act. She
explained that the New Jersey False Claims
Act, like the federal False Claims Act,
contains a whistle blower provision to provide
rewards to people who blow the whistle on
fraud.
New
Jersey administers the Medicaid program
through the Division of Medical Assistance
and Health Services and the Department of
Human Services. It administers the PAAD
and SG programs through the Department of
Health and Senior Services. The Medicaid
Fraud Control Unit in the Division of Criminal
Justice investigates both criminal and civil
Medicaid fraud and fraud against other state-funded
health care programs.
Attorney General Dow credited Assistant
Attorney General John Krayniak, Senior Counsel
in the New Jersey Medicaid Fraud Control
Unit, for representing New Jersey in this
matter and pursuing the PAAD and SG program
recoveries after the Medicaid aspect of
the case was settled.
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