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French pharmaceutical giant Sanofi-Aventis agreed to pay $190 million to settle allegations of fraud in the pricing and marketing of a drug used for cancer treatment side effects, the U.S. Justice Department announced Monday.
The case arose from a lawsuit filed under the False Claims Act by Ven-A-Care of the Florida Keys Inc., which will receive about $32 million under the settlement.
Ven-A-Care is a small specialty pharmacy created in the late 1980s that provides infusion, inhalation, and injectable pharmaceuticals to seriously ill outpatients, such as people suffering from AIDS.
The civil settlement involves an alleged scheme by Sanofi-Aventis to artificially inflate the price of the drug Anzemet, increasing the cost of government reimbursements for the drug. U.S. officials say the result was that false Anzemet claims were submitted to federal health programs.
“Corporations cannot continue to mislead the government into paying vastly exaggerated prices by exploiting a health care system based on trust and fair play,” Miami U.S. Attorney R. Alexander Acosta said.
Sanofi-Aventis, based in Paris, said in a statement that the case involved predecessor company Aventis Pharmaceuticals Inc. from September 1997 to June 2004, before the formation of the new company. Sanofi-Aventis acknowledged no wrongdoing.
The bulk of the settlement will be paid to the federal government, with a $10.2 million fund created for states and the District of Columbia to pursue potential Medicaid overpayment claims for the drug. Medicaid is the government-funded health care program for the poor.
In addition, Sanofi-Aventis' subsidiary in the U.S. reached a five-year agreement with the Health and Human Services Department to report sales and manufacturer's prices for its drugs covered by federal programs.
Ven-A-Care is no stranger to whistle-blowing - and big bucks because of it.
In the past, its four partners accused a global pharmaceutical powerhouse of selling drugs to the federal government at illegally inflated prices.
The four split $26 million of the $150 million that GlaxoSmithKline agreed to last September to pay the government to settle claims that it overcharged for two drugs used to treat cancer.
Whistle-blowing - filing lawsuits that expose rip-offs against the government - has paid off before for the pharmacy owners, resulting in rewards now totaling more than $100 million.
“You just start digging, and it starts coming out,” Luis Cobo, a Key West pharmacist who co-owns Ven-A-Care, told the Miami Herald in September.
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