Uh-oh, Sepracor says. The maker of the Lunesta sleeping pill estimates that it owes Medicaid between $80 million and $100 million, because it charged too much for its products from 2002 to 2007. The pricing problems surfaced in an internal audit of its best pricing for Medicaid and other state programs. To account for the problems, Sepracor will restate its earnings from the first three quarters of 2007, plus fiscal years 2002 through 2006. And whoever is in charge of the Medicaid rebate checkbook will be very busy.
To its credit, Sepracor found the problems on its own and volunteered to remedy them. A veritable honor roll of Big Pharma has coughed up for Medicare and Medicaid overcharges only after the feds and states twisted their arms.
Separately, Sepracor agreed to buy the rights to two new FDA-approved drugs from Nycomed, a move analysts say will outweigh the pricing problems. Sepracor has agreed to pay up to $430 million, including $150 million up front, for U.S. rights to the asthma drug Alvesco and the anti-allergy Omnaris AQ nasal spray. The company expects to launch both meds this year.
Lunesta moth tops memorable drug ads. Report
Nycomed to acquire Bradley Pharma. Report