Aventis Pharmaceuticals Held Accountable For Defrauding Kansas Medicaid Program

Feb. 13, 2008 -- Kansas Attorney General Steve Six today announced an agreement with Aventis Pharmaceuticals, Inc. that will settle claims that it defrauded the Kansas Medicaid program through its drug pricing and marketing practices. Kansas will receive $743,209.81 through the settlement.

“Cases like this will show many in the pharmaceutical industry that we will not tolerate abuse of the system, fraud or creative pricing at the expense of the Kansas Medicaid Program and Kansas citizens,” Six said.

Aventis settled with Kansas, as well as 37 other states, the United States government and the District of Columbia. An investigation conducted by the United States Department of Justice and the National Association of Medicaid Fraud Control Units revealed that Aventis caused false claims to be submitted to federal healthcare programs by inflating the average wholesale price of their drug, Anzemet.

Anzemet is used in oncology and radiation treatment to prevent nausea and vomiting. The investigation began following a complaint filed by a whistleblower who alleged Aventis’ drug pricing and marketing schemes violated the federal False Claims Act.

From September 1, 1997 through June 30, 2004, Aventis allegedly “marketed the spread” on Anzemet in order to increase its market share and increase its profits. The “spread” was the difference between the amount the healthcare providers (pharmacies, hospitals, doctors, etc.) were required to pay the pharmaceutical company for the drug and the amount the healthcare provider was reimbursed by Medicaid. Under this scheme, the healthcare provider billed Medicaid for the inflated average wholesale price and kept the “spread” (or difference).

The “spread” was marketed to healthcare providers as a way of increasing the healthcare providers’ profits when they received their reimbursement from Medicaid. This practice was also used by Aventis to increase the market share for the drug and the profits for the company.

The federal and state civil settlement agreement requires Aventis to pay $22.7 million plus interest to the Medicaid program. Additionally, Aventis has entered into a Corporate Integrity Agreement with the Office of Inspector General for the United States Department of Health and Human Services to ensure Aventis’ future compliance with price reporting requirements.

Under the terms of the settlement agreements, the United States received $12.5 million of that amount, and the remaining $10.22 million will be distributed to the states. Kansas’ participation in the settlement resulted in a total recovery of $743,209.81 for the state’s Medicaid Program.

Source: Kansas Attorney General

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