Drug maker pays $2.2 million settlement to N.C.

State Attorney General Roy Cooper announced that drug maker Aventis Pharmaceuticals has agreed to pay $95.5 to the federal government and states, including $2.2 million to North Carolina for underpaying rebates to Medicaid for their allergy medications.

The settlement resolves allegations that Aventis and its corporate predecessors knowingly misreported the best prices for their allergy medications Azmacort, Nasacort and Nasacort AQ from 1995 to 2000. As a result, Medicaid programs in North Carolina and other states paid too much for Aventis’ allergy nasal sprays.

“Underpaying rebates to Medicaid means overcharging North Carolina taxpayers,” Cooper said in a press release. “This is a significant recovery and we’ll keep working to win back money whenever drug companies try to cheat.”

Under the Medicaid Drug Rebate Statute, drug manufacturers like Aventis are required to report to Medicaid the lowest price that it charged commercial customers for its drugs and must pay quarterly rebates to Medicaid based on those reported prices.  However, Aventis repackaged its allergy drugs under health maintenance organization Kaiser Permanente’s private label. The private label sales meant that Aventis failed to pay millions of dollars in drug rebates to Medicaid and other federal health programs.

Including the $2.2 million North Carolina will receive, state Medicaid programs across the country will receive more than $40 million in the settlement. The federal portion of Medicaid will receive approximately $49 million. And, certain public health service entities that paid inflated prices for the allergy medications will receive $6.5 million.

Aventis’ parent company, Sanofi-aventis, was already required to report its pricing information to the government as a result of a prior drug pricing settlement with the company’s drug Anzemet.