WASHINGTON—Three U.S. drug makers and their affiliates have agreed to settle federal charges that they engaged in a scheme to report inflated drug prices to get higher reimbursements from government medical-care programs.
Abbott Laboratories Inc., B. Braun Medical Inc., Roxane Laboratories Inc. and affiliated entities have agreed to pay $421 million to settle the charges, the Justice Department said.
The drug makers are accused of reporting to national pricing lists inflated costs for certain drugs. The government used those lists to reimburse physicians and pharmacies under Medicare and Medicaid. In essence, doctors and physicians bought drugs from the manufacturers at a lower price, were reimbursed by the government at a higher price and pocketed the difference, the Justice Department said.
The scheme cost taxpayers "many millions" of dollars in false payments, Justice officials said.
The arrangement gave doctors and pharmacies a big incentive to prescribe the three drug makers' products, Justice officials said.
"Medicare and Medicaid in essence footed the bill for Abbott's marketing budget," said Wilfredo Ferrer, U.S. attorney for the Southern District of Florida.
Abbott spokesman Scott Stoffel said the company believes it has "complied with all laws and regulations" and it agreed to the settlement "to eliminate the uncertainty associated with continued litigation."
The Abbott Park, Ill., maker of the anti-inflammatory drug Humira previously booked a reserve for the settlement and it won't affect fourth-quarter earnings, Mr. Stoffel said.
By Josh Mitchell
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