The Department of Justice announced Monday the Wisconsin Medicaid program will receive more than $1.1 million in restitution from a settlement agreement concerning fraud from pharmaceutical companies.
Those companies included IVAX Corporation, now Teva Pharmaceutical Industries, a Florida corporation that manufactured generic drugs, as well as Omnicare, a Delaware corporation that specializes in providing pharmaceutical services to long-term care facilities.
The settlement stemmed from lawsuits alleging the two companies engaged in unlawful kickback schemes which defrauded federal and state healthcare programs, according to a statement released Monday by DOJ. Wisconsin is one of the Medicaid-participating states to have been defrauded by the companies.
According to the settlement documents, IVAX agreed to a contract providing for Omnicare to purchase certain IVAX pharmaceutical products. Omnicare then submitted fraudulent drug reimbursement claims to Medicaid and Medicare, stemming back to January 2000.
Omnicare also made agreements with certain health care facilities at below market rate pricing to have exclusive rights to pharmaceutical distribution for said facility, the statement said.
As a result of the settlement, Omnicare and IVAX will pay respectively the sum of $98 million and $14 million plus interest to the federal government and Medicaid-participating states.
The state of Wisconsin will receive more than $2.6 million as its share, but the state Medicaid program will recover only half of the amount — about $1.1 million, as the other half goes to the federal government.
“The reimbursement will go directly back to the state Medicaid program, but because it is dually funded by the state and the federal government, the other part will go back to the federal government,” said Stephanie Smiley, spokesperson for the Department of Health Services.
She added the lawsuit was one of many filed against pharmaceutical companies in which Wisconsin is involved.
However, she said the settlement is good news to the state-funded health services because it relocates the inappropriately used money.
“We are very happy that we can recover the money for the Medicaid program. [It is] essential that we secure extremely limited resources we have. Now we have recovered the loss and have money to use wisely.”
