Aventis Pharmaceuticals Inc. Held Accountable for Defrauding State Medicaid Programs in a Drug Pricing Scheme

PIERRE, S.D.-  Attorney General Larry Long announced that South Dakota will receive $185,384.25 as part of a $95.5 million global settlement with Aventis Pharmaceutical, Inc. The South Dakota settlement agreement resolves allegations that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ.  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.

Aventis entered into “private label” agreements with Kaiser Permanente, a large health maintenance organization (HMO), to avoid reporting the best price for Azmacort, Nasacort and Nasacort AQ 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.

State Medicaid programs across the country will receive over $40 million of the settlement.  The federal portion of Medicaid recovery is approximately $49 million with an additional $6.5 million for certain public health service entities who also paid inflated prices for the drugs at issue.

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money. For additional information about this recovery please contact Sara Rabern at 605-773-3215.