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Attorney General Baker Announces $3.5 Million Dollar Medicaid Settlement With King Pharmaceuticals

PRESS ADVISORY

Attorney General Baker Announces $3.5 Million Dollar Medicaid Settlement With King Pharmaceuticals

March 22, 2006

Attorney General Thurbert E. Baker announced today a settlement of claims of the Georgia Medicaid program against King Pharmaceuticals, a pharmaceutical manufacturer, as part of a nationwide settlement involving the State of Georgia, the federal government, and a number of other states. The total value of Georgia’s portion of the settlement is $3,536,227.00. Of that amount, $1,478,157.07 in state funds has been recovered, and delivered to the Georgia Department of Community Health, which administers the Georgia Medicaid program. The balance of the settlement has been delivered to the federal government to reimburse the federal share of payments made by the Georgia Medicaid program.

King Pharmaceuticals, a Tennessee-headquartered manufacturer of generic drugs, entered into civil agreements with the State of Georgia, the federal government and a number of other states to resolve claims that, from 1994 through 2002, King had not accurately calculated “best price” drug prices reported to state and federal governments for the purpose of establishing rebates due to state Medicaid programs under applicable drug rebate statutes. As a result of these inaccurate price calculations, King Pharmaceuticals underpaid the Georgia Medicaid and other state Medicaid programs by some $62 million during the time period of the settlement. The settlement includes a double damages penalty, resulting in a total nationwide settlement figure of $124 million. The settlement with King Pharmaceuticals further requires the company to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, in order to monitor the company’s operations and ensure compliance with the law in the future.

The settlement was negotiated by state Medicaid Fraud officials and the United States Department of Justice. Georgia’s Medicaid Fraud Control Unit is a jointly operated law enforcement unit of the Georgia Attorney General’s Office, the Georgia Department of Audits, and the Georgia Bureau of Investigation.