Merck settles fed claims for $671M

You can't say Merck does things in a small way. The company has agreed to pay $671 million to settle claims that it overcharged the government for drugs and bribed doctors to prescribe certain meds. It's one of the biggest U.S. healthcare fraud settlements ever, the Associated Press reports.

It's another case involving so-called "nominal pricing," in which hospitals that used lots of Merck products got big discounts. By law, drug companies have to give Medicaid the same discounts or rebates extended to other customers.

Merck will hand over $399 million for improperly calculating Medicaid rebates and bribing docs, and, separately, pay $250 million for its rebate practices. But, the company hasn't admitted any wrongdoing; a spokesman told the AP that it and the government disagree about the rules governing Medicaid rebates. Settling with the feds was the "best and most appropriate way" to resolve the investigations, which have been percolating since 2000, when a company whistleblower alerted prosecutors.

Incidentally, that whistleblower gets $68 million as part of this deal. Under federal law, employees that tell on their bosses are entitled to a cut of any revenue the government recoups.

- see this release from Merck
- check out the AP report
- read this article in the Financial Times
- see this item in the Wall Street Journal Health Blog

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