In one of the biggest U.S. health care fraud settlements ever, Merck & Co. will pay $671 million to settle claims it overcharged the government for four popular drugs and bribed doctors to prescribe its drugs, federal prosecutors said Thursday.
The alleged overcharges, dating back to the mid-1990s, involved Medicaid programs in the District of Columbia and every state but Arizona, as well as federal health-insurance programs at agencies including the Department of Defense and Veterans Administration.
A nationwide investigation by federal prosecutors, triggered in 2000 by a former Merck salesman-turned-whistleblower and broadened by a Louisiana doctor who also exposed overcharging, resulted in two settlements announced Thursday.
In Philadelphia, prosecutors said Merck agreed to pay $399 million for improper calculation of Medicaid rebates and bribing doctors. In New Orleans, prosecutors said the drugmaker agreed to pay $250 million for its rebate practices. With interest, that totals $671 million.
“Not only is the combined recovery in these two cases one of the largest health care fraud settlements ever achieved by the Justice Department, it reflects our continuing efforts to hold drug companies accountable for devising pricing schemes” that overcharge the government, said Attorney General Michael D. Mukasey.