Attorney General McKenna announces multi-million dollar settlement with drug manufacturer

States, federal government say makers of three nasal sprays shorted Medicaid

OLYMPIA – Attorney General Rob McKenna today announced that Washington state will receive more than $2.6 million as part of a $95.5 million global settlement with Aventis Pharmaceutical, Inc, to resolve allegations that Aventis and its corporate predecessors shortchanged taxpayer-funded health care programs.

The U.S. Health Department and all 50 states, plus the District of Columbia, say that Aventis profited by knowingly misreporting “best prices” for three steroid-based anti-inflammatory nasal sprays: Azmacort, Nasacort and Nasacort AQ.  Washington’s portion of the recovery will be evenly split with the federal government, which jointly funds Medicaid. 

“This is a substantial recovery for our Medicaid program, which was overcharged by Aventis,” said Attorney General Rob McKenna. “The settlement once again demonstrates that we aggressively pursue those who attempt to siphon tax dollars away from a fund that provides health care for children, seniors and those with disabilities.”

Under the Medicaid Drug Rebate Statute, Aventis was required to report the lowest or “best” price that it charged commercial customers – and pay quarterly rebates to Medicaid based on those reported prices. Washington’s settlement resolves allegations that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported the information in order to make more money on the nasal sprays. 

Aventis licensed these products to be sold by Kaiser Permanente, a large health maintenance organization, to avoid reporting the best price that would have obligated it to pay millions of dollars of drug rebates to Medicaid. Aventis repackaged its drugs under Kaiser’s “private label,” resulting in the underpayment of drug rebates to the Medicaid program and to several other federal health programs.

Aventis Pharmaceutical’s parent company, Sanofi-Aventis, has now entered into a new corporate agreement with the Office of Inspector General of the U.S. Department of Health and Human Services. Under the new agreement, Sanofi-Aventis is required to report certain best price information for drugs covered by Medicaid and other health care programs.  The company was already required to report other pricing information to the government as a result of a prior settlement concerning the company’s drug, Anzemet.
 

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Contacts:

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