Sanofi to pay $95.5M to settle pricing dispute

Sanofi-Aventis has agreed to pay $95.5 million plus interest to settle claims that its subsidiary, Aventis Pharmaceuticals, inflated the prices for its nasal spray meds. The company will pay $49 million to the federal government, another $40 million is earmarked for state Medicaid agencies and $6 million will go to other public health services agencies that claim to have also been overcharged.

The Justice Department charges that between 1995 and 2000, API colluded with Kaiser Permanente to repackage Azmacort, Nasacort and Nasacort AQ under new labels in order to avoid reporting the "best price" for the drugs. A scheme which allowed API to save millions in rebate payments to Medicaid. "When a drug company agrees to be a provider to the Medicaid programs, it agrees to sell its drugs to them at the same price it gives its best customers," said Michael K. Loucks, the acting U.S. attorney in Massachusetts who was involved in the Aventis investigation. "We will, as here, pursue those who break their promises."

Sanofi maintains that API's pricing reports followed the law and Sanofi is merely tapping into reserve cash to end the dispute. "Although the company believes API acted in accordance with the law at the time, the company elected to resolve this legacy matter through this settlement, without admitting any wrongdoing," the company said in a statement issued today.

- read the Sanofi release
- check out the Justice Dept. release

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