Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

Nov 3 2009

OLYMPIA—Attorney General Rob McKenna announced today that his Medicaid Fraud Unit participated in a settlement agreement that has generated a substantial payout from four drug companies accused of gaming a government health care program.

Mylan Pharmaceuticals, Inc., UDL Laboratories, Inc., AstraZeneca Pharmaceuticals LP, and Ortho McNeil Pharmaceutical, Inc., will pay a total of $124 million to the federal government and several states, including Washington, for classifying their drugs in a way that reduced the amount they owed in regular rebate payments to Medicaid.

“This settlement reminds pharmaceutical firms doing business with Medicaid that they must follow the rules,” said Attorney General McKenna. “Drug companies are often great innovators, developing products that improve our lives. But when those companies sell their drugs to publicly funded programs, we watch them closely to make sure they honor their agreements and don't overcharge the public.”

Pharmaceutical manufacturers that supply products to Medicaid Recipients are required by the Federal Medicaid Drug Rebate law to give the Medicaid the benefit of the best available prices for those products. As part of this agreement, drug companies are required to rebate to the federal and state governments a portion of their revenues from sales to Medicaid patients.

This settlement resolves claims that the four companies involved violated the False Claims Act by failing to pay appropriate rebates for drugs that were paid for by Medicaid, in part classifying certain drugs in a way that reduced quarterly rebate amounts and maximized profits from sales to the state and federal health care program.

After paying out the federal government’s share of the $1.3 million settlement, Washington state will receive more than $711,000.

A National Association of Medicaid Fraud Control Units team participated in the settlement negotiations with all four pharmaceutical companies on behalf of the settling states. Team members included representatives from the states of New Hampshire, Ohio, and New York. Assistant Attorney General Aileen Miller, of the Washington Attorney General’s Medicaid Fraud Unit, represented our state’s interest in the case.




Janelle Guthrie, AGO Communications Director, (360) 586-0725