Merck Pays Utah $2.25 Million In Medicaid Rebate Settlement

February 7, 2008 -- The manufacturer of Zocor, Vioxx and Pepcid will pay Utah $2,256,337 for failing to give rebates to the state Medicaid program. Merck is paying a total of $649 million as part of two separate global settlements involving 49 states and the federal government.

“Merck is paying a great price for failing to be fair to taxpayers. I hope this will send a loud message to all pharmaceutical companies to play fair and pay up in the first place,” says Attorney General Mark Shurtleff.

Pharmaceutical manufacturers are required by the Federal Medicaid Drug Rebate law to give Medicaid programs the benefit of the “best price” available for those products. The manufacturers are required to file “best price” information with the Centers for Medicare and Medicaid Services (CMS). This information is then used to calculate rebates to be paid by these manufacturers to the state Medicaid programs.

Merck failed to report it offered 92% discounts to hospitals for selling Zocor and Vioxx. The company also failed to report that hospitals were able to get discounts up to 92% for Pepcid tablets. The states contend that Merck was required to report these discounted prices to CMS and their failure to do so resulted in less rebates paid to state Medicaid programs.

In addition to the monetary settlement, Merck agreed to market, sell and promote its products in accordance with all federal health care program requirements.

Robert E. Steed, Director of the Utah Medicaid Fraud Unit, represented Utah in this settlement. “Transparency and integrity are essential to managing the enormous cost of prescription drugs in Medicaid and our health care system,” says Steed. “We will continue to hold drug manufacturers accountable to follow the law.”

The Utah Attorney General’s Office oversees the Medicaid Fraud Unit to protect the integrity of Utah’s Medicaid program. The public can learn more about Medicaid fraud or report abuse at www.medicaidfraud.utah.gov or call (800) 244-4636.

Source: Utah Attorney General

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