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Van Hollen Announces Pharmaceutical Settlement


MADISON - Attorney General J.B. Van Hollen today announced that Wisconsin Medicaid will receive a state share of $923,230.96 as part of a settlement with Aventis Pharmaceutical, Inc, a wholly-owned subsidiary of sanofi-aventis U.S., LLC.  The state share is part of the total settlement amount of $2,051,624.35 attributable to the Wisconsin Medicaid program as part of a $95.5 million multi-state settlement.  Medicaid is a federal and state jointly funded medical assistance program. 


The Wisconsin 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 state Medicaid programs, including Wisconsin's.  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 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.


Aventis Pharmaceutical's parent company, sanofi-aventis, entered into an Addendum to a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.  Under the Addendum, sanofi-aventis is required to report certain best price information for drugs covered by Medicaid and other health care programs.  The company was already under a corporate integrity agreement requiring it to report other pricing information to the government as a result of a prior drug pricing settlement concerning the company's drug Anzemet.


"This is a substantial recovery for our Medicaid program," Van Hollen stated.  "Aventis underpaid their rebates and overcharged the states for these products.  This conduct will not be tolerated, and we will aggressively enforce the law to maintain the integrity of our Medicaid program."