For Immediate Release:
Tuesday, August 17, 2021
Nazneen Ahmed (919) 716-0060
(RALEIGH) Attorney General Josh Stein reached a $75 million multistate settlement with pharmaceutical company Bristol-Myers Squibb over allegations that it overcharged state Medicaid programs for drugs. North Carolina will receive $2,490,905.91.
“Bristol-Myers Squibb cheated North Carolina’s Medicaid program of funds it should have paid,” said Attorney General Josh Stein. “That’s unlawful, and it deprived Medicaid of money that should have gone to people’s health care. My office will hold businesses accountable when they defraud Medicaid.”
The settlement resolves allegations that Bristol-Myers Squibb underpaid drug rebates to the states. Under federal law, drugmakers must return a portion of the amount that state Medicaid programs pay for their drugs. This rebate is designed to ensure that states pay competitive prices for drugs. The rebates are calculated based on a percentage of the average prices that drug wholesalers pay for each of the drugs. The manufacturer reports this price to the federal government, and the greater the price, the greater the rebate the manufacturer must pay states for the drug.
A whistleblower’s complaint alleged that Bristol-Myers Squibb falsely decreased the price of drugs it reported to the federal government, and as a result, paid less to the states, by improperly treating certain fees paid to wholesalers as discounts and improperly failing to include certain price appreciation amounts it received from wholesalers.
Attorney General Stein’s Medicaid Investigations Division led a National Association of Medicaid Fraud Control Units team in the investigation and settlement of this case. The team also included California, Florida, New York, and Texas.
About the Medicaid Investigations Division (MID)
The Attorney General’s MID investigates and prosecutes health care providers that defraud the Medicaid program, patient abuse of Medicaid recipients, patient abuse of any patient in facilities that receive Medicaid funding, and misappropriation of any patients’ private funds in nursing homes that receive Medicaid funding. To date, the MID has recovered more than $900 million in restitution and penalties for North Carolina. To report Medicaid fraud or patient abuse in North Carolina, call the MID at 919-881-2320.
The Medicaid Investigations Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,160,252 for Federal fiscal year (FY) 2020. The remaining 25 percent, totaling $2,053,414 for FY 2020, is funded by the State of North Carolina.