Mylan And Other Drugmakers Settle Medicaid Claims

NEW YORK (AP) — Mylan Inc. and two other drugmakers will pay $124 million to settle claims they did not properly reimburse Medicaid for drugs, officials said Monday.

New York Attorney General Andrew Cuomo said two Mylan subsidiaries, along with one division of AstraZeneca PLC and part of Johnson & Johnson, violated the False Claims Act. Mylan, which is based in Pittsburgh, said it will pay $121 million. Mylan's estimate is $3 million greater than Cuomo's due to interest payments.

Between 2000 and 2004, Medicaid bought drugs from the companies, and the drugmakers reimbursed Medicaid once per quarter. But the companies underpaid by pricing the drugs at a lower rate, Cuomo's office said.

Medicaid classifies some products as "innovator" drugs, which get higher rebates than "non-innovator" drugs. The government said Medicaid was paying innovator rates to the companies, and the drugmakers were reimbursing Medicaid at the lower non-innovator prices.

The settlements resolve all claims between the federal and state governments and the drugmakers. Mylan said its Mylan Pharmaceuticals and UDL Laboratories businesses acknowledged no wrongdoing, and the company said it will take an $83 million charge in the third quarter as a result of the settlement.