DENVER — Colorado Attorney General John W. Suthers today announced that Colorado has received $421,000 as part of a $95.5 million settlement with Aventis Pharmaceuticals, Inc., a wholly-owned subsidiary of sanofi-aventis U.S., LLC. The agreement resolves allegations that Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ between 1995 and 2000. The Office of the Attorney General’s Medicaid Fraud Control Unit facilitated Colorado’s share of the settlement.
Under the federal Medicaid Drug Rebate Program, pharmaceutical manufacturers are required to give the same prices to state Medicaid programs that they give to private distributors. When a state Medicaid program pays more than the best possible price, the manufacturer is required to issue a rebate for the difference. According to the allegations, Aventis entered into private-label agreements with Kaiser Permanente, a large health maintenance organization, to avoid reporting the best price for these drugs that would have obligated it to pay millions of dollars of drug rebates to state Medicaid programs. Aventis repackaged its drugs under Kaiser’s private label, resulting in the underpayment of drug rebates to the Medicaid program and to several other federal health programs.
Colorado’s Medicaid program pays out nearly $4 billion every year for the medical care of approximately 700,000 qualified recipients. The 14-member Medicaid Fraud Control Unit investigates and prosecutes providers suspected of defrauding the Colorado’s Medicaid program. The Medicaid Fraud Control Unit also investigates and prosecutes cases involving the physical and financial abuse of seniors and other residents of federally funded long-term care facilities.