Pennsylvania Attorney General Corbett announces $8.5 million PA drug pricing settlement with Merck & Co.

February 7, 2008 -- HARRISBURG - Pennsylvania Attorney General Tom Corbett today announced that Pennsylvania will receive more than $8.5 million as part of two separate national settlements with Merck & Co., over the pricing of various drugs, including Zocor, Vioxx and Pepcid.

The national settlements with Merck, totaling $649 million, involve 49 states, the District of Columbia and the federal government. The agreements resolve allegations that the company overcharged state Medicaid programs for these drugs.

Corbett said that federal law requires drug companies to provide various Medicaid programs with the "best price" available for their products. Drug companies are also required to report various discounts that may lower the "best price" of their products. According to federal lawsuits filed in Pennsylvania, Nevada and Louisiana, Merck failed to disclose generous drug price discounts offered to various hospitals as part of sales promotions.

Corbett said the settlement agreements call for a payment of $5,051,686 to Pennsylvania involving state Medicaid overpayments for Pepcid, which is used to treat heartburn and stomach ulcers, along with $3,532,923 involving state Medicaid overpayments for Zocor, a cholesterol-reducing drug, and Vioxx, a pain relieving medication.

"This is a significant recovery for Pennsylvania's Medicaid program," Corbett said. "This case should also send a clear message to other drug companies that we do not tolerate efforts to avoid providing the 'best price' to state and federal government programs."

Corbett said that in addition to the financial recovery for Pennsylvania and other states, Merck has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services. The agreement will include provisions to ensure that Merck will market, sell and promote its products in accordance with all federal health care program requirements. Merck did, however, begin voluntary compliance initiatives associated with their sales and marketing activities prior to learning of the government's investigation of the conduct associated with these settlements.

The National Association of Medicaid Fraud Control Units conducted the settlement negotiations on behalf of the states, with representatives of the Nevada, Illinois, Delaware and Massachusetts Medicaid Fraud Control Units leading the effort.

Source: Pennsylvania Attorney General

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