Feeds:
Posts
Comments

Archive for the ‘Merck’ Category

Merck to Pay More than $650 Million to Resolve Claims of Fraudulent Price Reporting and Kickbacks

DEPARTMENT OF JUSTICE
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 7, 2008
WWW.USDOJ.GOV

WASHINGTON — Merck & Company has agreed to pay more than $650 million to resolve allegations that the pharmaceutical manufacturer failed to pay proper rebates to Medicaid and other government health care programs and paid illegal remuneration to health care providers to induce them to prescribe the company’s products, the Justice Department announced today. The allegations were brought in two separate lawsuits filed by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act.

“Not only is the combined recovery in these two cases one of the largest healthcare fraud settlements ever achieved by the Justice Department,” said Attorney General Michael B. Mukasey, “it reflects our continuing effort to hold drug companies accountable for devising pricing schemes that deliberately seek to deny federal health care programs the same lower prices for drugs that are available to other commercial customers.”

H. Dean Steinke, a former Merck employee, alleged in his suit filed in Philadelphia that Merck violated the Medicaid Rebate Statute in connection with its marketing of its drugs Zocor and Vioxx. (Zocor is a cholesterol lowering drug and Vioxx, pulled from the market by Merck in September of 2004, was used for the treatment of acute pain and in the treatment of arthritis.) Merck allegedly offered deep discounts for the two drugs if hospitals used large quantities of those drugs in place of competitors’ brands.

The Medicaid Rebate Statute requires that drug manufacturers report their “best prices” and other cost information to the government in order to ensure that Medicaid obtains the benefit of the same discounts and price concessions that other purchasers enjoy. An exception to this rule allows manufacturers to exclude from the prices they report any discounted prices that are “nominal” in amount. Merck improperly termed as “nominal” the prices it offered to hospitals to boost their sales and excluded those discounts from the prices it reported to the government.

Steinke’s suit further alleged that from 1997-2001, Merck had approximately fifteen different programs used by its sales representatives to induce physicians to use its many products. These programs primarily consisted of excess payments to physicians that were disguised as fees paid to them for “training,” “consultation” or “market research.” In fact, the government alleged that these fees were illegal kickbacks intended to induce the purchase of Merck products. Merck agreed today to pay $399 million plus interest to settle the Medicaid Rebate as well as the kickback allegations.

In a separate suit filed by physician William St. John LaCorte in New Orleans, it’s alleged that Merck had established a marketing scheme in which it provided substantially reduced prices for its Pepcid products once the hospitals agreed to primarily use the drug instead of a competitor’s. (Pepcid is used to reduce stomach acid and to treat heartburn and acid reflux.) Merck allegedly offered these incentives to hospitals in order to obtain the benefit of spillover business when patients would continue to purchase Pepcid once he or she was discharged. Merck improperly termed as “nominal” the prices it offered to hospitals to boost the sales of Pepcid, excluded those discounts from the prices it reported to the government, and thus effectively denied the government the benefit of these lower prices. Merck agreed today to pay $250 million plus interest to settle these allegations.

Under the two settlement agreements, the federal government will receive more than $360 million, and forty-nine states and the District of Columbia over $290 million. In addition, Mr. Steinke will receive $44,690,000 from the federal share of the settlement amount and an additional $23.5 million from the states. Similarly, Dr. LaCorte will receive a share of the proceeds from the federal and state settlement amounts under their respective qui tam statutes.

“Our health insurance programs rely upon the integrity of health providers, including pharmaceutical manufacturers, when they report to the government programs which reimburse their products and services with scarce funds,” said Patrick L. Meehan, U.S. Attorney for the Eastern District of Pennsylvania, whose office led the investigation of the Steinke matter.

“Particularly in the wake of Hurricane Katrina, it is critical that precious government resources not be lost to fraud and abuse,” said Jim Letten, the U.S. Attorney for the Eastern District of Louisiana, whose office led the investigation of the LaCorte matter. “This office is dedicated to prosecuting pricing fraud so that healthcare dollars go to help the most vulnerable of our citizens – the disabled and the poor.”

“The Office of Inspector General has a strong record of pursuing violations in the Medicaid drug rebate program and is working closely with Federal and State law enforcement to hold accountable pharmaceutical companies engaged in illegal practices resulting in Medicaid fraud,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services.

Today’s settlement was the result of close cooperation between the Justice Department, state attorneys general and other law enforcement entities including Medicaid Fraud Control Units, and the Office of Inspector General of the Department of Health and Human Services.

As part of the resolution of these two cases, the Department of Health and Human Services Office of Inspector General (HHS-OIG) and Merck have entered into a five-year Corporate Integrity Agreement to ensure that such improper conduct does not occur in the future.

TO REVIEW THE COMPLETE REPORT CLICK ON THE LINK BELOW

Read Full Post »

Merck Settles Clean Water Act Violations at its Montgomery County, Pennsylvania Pharmaceutical Plant

DEPARTMENT OF JUSTICE

FOR IMMEDIATE RELEASE
THURSDAY, DECEMBER 13, 2007
WWW.USDOJ.GOV

WASHINGTON—Merck, the global pharmaceutical research company, has agreed to resolve violations of federal and state water pollution control regulations arising from spills including a June 2006 spill at its pharmaceutical plant outside of Philadelphia, announced Pat Meehan, U.S. Attorney for the Eastern District of Pennsylvania, Ronald J. Tenpas, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, the Environmental Protection Agency, and the Pennsylvania Department of Environmental Protection.

In one of the most comprehensive remediation settlement agreements for the Eastern District of Pennsylvania, Merck will pay $10 million to put into place systems that will prevent future dangerous discharges at their facility. Merck will spend approximately $9 million for extensive environmental projects. A consent decree requires Merck to pay $1,575,000 in penalties and civil damages for past violations divided as follows: $750,000 to the United States; $750,000 to the Commonwealth of Pennsylvania; $75,000 to the Pennsylvania Fish and Boat Commission.

“Perhaps more than anything else, this settlement says to every company that discharges dangerous chemicals as part of its operations that it is accountable to the environment and the community,” said U.S. Attorney Meehan. “Because when you get right down to it, no one should have to wonder, when they walk into the kitchen for a glass of water, if what they are about to drink is going to make them or their children sick.”

“Merck’s actions led to an extensive fish-kill and caused the Philadelphia Water Department to temporarily shut down its drinking water operations,” said Acting Assistant Attorney General Tenpas. “This settlement ensures that Merck will take steps to prevent future illegal discharges including installing an early warning system to protect drinking water.”

The Merck facility, a pharmaceutical plant located in West Point, Pa., houses pharmaceutical and vaccine research as well as the manufacturing of pharmaceutical products and vaccines. The facility consists of approximately 400 acres, 110 buildings employing approximately 8,500 employees. Merck discharges pollutants from this facility to the Upper Gwynedd Township Publicly Owned Treatment Works (UGT POTW). The treated effluent is discharged into the Wissahickon Creek, a tributary of the Schuylkill River.

The federal court complaint, filed today, along with the settlement papers, alleges that Merck violated the Clean Water Act with several discrete discharges that caused numerous pass through and interference violations at the UGT POTW:

-On June 13, 2006, Merck discharged potassium thiocyanate (KSCN) that reacted with the chlorination at UGT POTW and after discharge caused extensive fish kills in the Wissahickon Creek on June 14th and 15th; also causing the Philadelphia Water Department to close its Schuylkill River drinking water intake on June 14th and 15th; and causing PA DEP to issue health advisories to ban all recreational uses on the Wissahickon Creek for the period June 14, 2006, through July 10, 2006.

-On Aug. 8 and 9, 2006 Merck discharged a large batch of spent substrate used for vaccine production which when treated at UGT POTW caused extensive foam discharge into the Wissahickon Creek.

-On Aug. 16, 2006, Merck discharged a large amount of cleaning agents that when treated at UGT POTW caused extensive foam discharge into the Wissahickon Creek.

The proposed consent decree includes interim measures undertaken already to: prevent discharges without pre-approval; create a tracking system for waste handling; create a task force to assess the system throughout the facility, and impose increased testing and assessment tools for waste stream. The decree contains Merck’s commitment to long term remedial measures including: a prevention program; an enhanced wastewater management program; and a chemical management accountability system for the facility. The estimated costs of these measures are in excess of $10 million.

“The resolution of this case and its special projects will bring both short and long-term environmental benefits to the community and the Wissahickon,” said Donald S. Welsh, EPA’s mid-Atlantic regional administrator. “When you consider that the source of 40 percent of Philadelphia’s drinking water is just downstream of this facility, these improvements and Merck’s environmental accountability has implications extending beyond the boundaries of its facility.”

The proposed consent decree also includes extensive environmental projects designed to improve the water quality and/or protect the Wissahickon as a source of drinking water. Merck has committed to: restoration of a segment of the Wissahickon Creek to improve the water quality of this key tributary of the Schuylkill River; creation of a wetlands on a 10 acre parcel of property adjacent to the creek; purchase and installation of an aquatic bio-monitoring system that monitors fish activity to give the Philadelphia Water Department an early warning system regarding materials in the Wissahickon Creek that may constitute a threat to the drinking water; the purchase and installation of an enhanced Automated Dissolved Oxygen Controls at the Upper Gwynedd Treatment Plant.

Each supplemental environment project, or SEP, is designed to improve water quality and/or protect the Wissahickon as a source of drinking water.

In addition the decree calls for Merck to contribute $4.5 million toward the purchase of a parcel of land adjacent to the creek that will have restricted use and open space easements in perpetuity.

The proposed consent decree is subject to a 30 day public comment period and final court approval. The case was handled by Assistant U.S. Attorney Margaret L. Hutchinson for the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Martha Blasberg, Supervisory Counsel, PADEP, represented the Commonwealth of Pennsylvania. The matter was investigated by EPA Region III Water Protection Division, PADEP and the Pennsylvania Fish and Boat Commission.

To review the complete report click on the link below

Read Full Post »