King Pharmaceutical to Reimburse State in Medicaid Fraud Settlement

PIERRE, S.D. - Attorney General Larry Long announced today that South Dakota’s Medicaid Program will receive $170,390 in restitution and penalties as part of an agreement with King Pharmaceutical, Inc. The settlement results from King Pharmaceutical incorrectly reporting prices to the government for several of its drugs. As a result, King Pharmaceutical paid millions of dollars less in rebates to government entities, including state Medicaid programs. 

King Pharmaceuticals Inc., a Tennessee-headquartered manufacturer of generic drugs, entered into civil agreements to address allegations that, from 1994 through 2002, King had not accurately calculated drug prices reported to the federal government for the purpose of establishing rebates due to state Medicaid programs under the federal Medicaid drug rebate statute. As a result of these incorrect price calculations, Medicaid and other programs that were due rebates from King Pharmaceuticals were underpaid some $62 million nationwide. The settlements include a double damages penalty, resulting in the total settlement figure of $124 million.

The civil settlements with King Pharmaceuticals further require the company to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, in order to monitor the company’s operations and ensure compliance with the law in the future. 

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