Bloomberg News

Mylan to Pay $57 Million to Settle Drug Overpricing Claims

February 28, 2012

Mylan Inc. (MYL), the generic-drug company, agreed to pay $57 million to settle claims it caused the U.S. and California to overpay for drugs.

The settlement, filed yesterday in federal court in Boston, came in cases filed by Ven-A-Care of the Florida Keys Inc., a specialty pharmacy. California will get $26.3 million, the U.S. will get $22.2 million, and Ven-A-Care and its attorneys will get $8.5 million, court records show.

Ven-A-Care sued under the U.S. False Claims Act and a similar statute in California, which lets whistle-blowers sue on behalf of the government and share in any recovery. While the California attorney general joined the lawsuit, the U.S. Justice Department didn’t.

The U.S. will still share in the recovery in the lawsuit, which is part of the so-called average wholesale price litigation consolidated before U.S. District Judge Patti Saris in Boston. She must approve the settlement.

Michael Laffin, a spokesman for Canonsburg, Pennsylvania- based Mylan, didn’t immediately return a call seeking comment.

Ven-A-Care has settled more than two dozen lawsuits since 2000 that allowed state and federal governments to collect more than about $3 billion. Ven-A-Care collected more than $400 million in whistle-blower fees during that period.

“This settlement would conclude Ven-A-Care’s cases in the AWP multidistrict litigation in Boston,” said its attorney, James Breen.

Ven-A-Care claimed that Mylan defrauded the U.S. and California by falsely reporting inflated prices of drugs. Mylan knew that the governments would use those false reports to set higher reimbursement rates for Medicaid, Ven-A-Care claimed. Mylan denied wrongdoing in the litigation and the settlement.

The case is In re Pharmaceutical Average Wholesale Price Litigation, MDL No. 1456, U.S. District Court, District of Massachusetts (Boston).

To contact the reporters on this story: David Voreacos in Newark, New Jersey at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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