Pharmaceutical company EMD Serono will pay $44.3 million to resolve allegations that it paid doctors to prescribe one of the company’s drugs.
The states attorneys general argue that kickbacks paid by EMD Serono resulted in fraudulent Medicaid claims for the drug Rebif, which is used to treat the relapsing forms of multiple sclerosis.
The 50 states and D.C.'s share of the money is $19 million for Medicaid, a federal-state program that provides health insurance for the poor. Of that, North Carolina will receive $759,263.83.
This is the sixth Medicaid fraud settlement with drug makers announced by Attorney General Roy Cooper’s office this year.
In announcing the settlement, Cooper's office noted that the medical malpractice bill currently winding its way through the General Assembly could prohibit similar cases against drug companies in the future.
House bill 542 protects pharmaceutical manufacturers from legal claims over wrongdoing as long as the drug has basic approval by the U.S. Food and Drug Administration. Cooper has argued against the bill, saying it will cost North Carolina millions.
“It makes no sense to tie our investigators’ hands at this time of growing health care costs and shrinking state budgets,” Cooper said in a statement announcing the settlement with EMD Serono.
A House floor vote on the bill has been rescheduled twice. It's now scheduled for May 31.
North Carolina and the other states began investigating EMD Serono in 2006 following a whistleblower lawsuit filed in Maryland under the Federal False Claims Act. A team from North Carolina, South Carolina, New York and Texas participated in the investigation and conducted settlement negotiations on behalf of all the states.
The investigators said that from March 2002 through December 2009 the company paid doctors for promotional speaking engagements, attending speaker training, advisory and consultant meetings, educational grants, and charitable contributions. The investigators alleged that these payments were made at least in part to get health care professionals to prescribe Rebif, which increased the number of claims for the drug submitted to Medicaid and paid for by taxpayers.
EMD Serono is the biopharmaceutical division of Germany-based Merck.