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Jul 28, 2015 by |

Pharmaceutical Companies Reach Settlement with Government in Medicaid Fraud Whistleblower Case


Two pharmaceutical companies, AstraZeneca and Teva Pharmaceutical’s Cephalon unit, have settled with the government after facing claims about rebates underpayment to Medicaid programs. The two companies have agreed to pay over 50 million dollars as a result of the Medicaid fraud allegations.

This is one of the latest actions taken against the pharmaceutical industry from the Department of Justice regarding Medicaid and Medicare price reporting. AstraZeneca will pay the government $46.5 million dollars plus interest, while Teva Pharmaceutical will pay approximately $7.5 million plus interest . The case began in 2008 when a whistleblower suit was filed that alleged that the drugmakers had decreased the rebates owed to Medicaid on purpose by lowering their prices.

According to the Medicaid Drug Rebate program, drugmakers have to pay quarterly rebates on the Average Manufacturer Prices (AMPs) they report to the government. The whistleblower and Department of Justice alleged that these companies paid service fees to wholesaler in order to be able to lower the AMPs, and pay a lower amount on the rebates. The Medicaid rebate program is based on the accurate price reporting from the drug manufacturers used in the rebate calculations.

The AstraZeneca drugs involved in the lawsuit are cholesterol-fighter Crestor and antipsychotic Seroquel, as well as Provigil and Actiq for Cephalon. AstraZeneca claims publicly that its price reporting decisions were properly released.

There have been other recent claims involving Medicare and Medicaid fraud by pharmaceutical companies in the past such as GlaxoSmithKline, Amgen, and Novartis. These companies all have paid several millions of dollars to the government because of fraud allegations on price reporting for some of their drugs.

Evans Law Firm, Inc. handles False Claims Act/qui tam and whistleblower lawsuits, including Medicare and Medicaid fraud cases. If you have a potential whistleblower claim, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at

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