An East Coast drugmaker is facing a lawsuit by the Federal government over allegations that it consistently underpaid Medicare rebates it was obliged to pay on a drug due to significant price increases to it.
Per the allegations lodged in a complaint filed by a whistleblower, the firm has been calculating Medicare rebates as though the drug was first marketed in 2013, despite the fact that it first came on the market over 30 years ago. The defendant allegedly calculated rebates by using the date it was initially cleared to be used in a novel way in 2010.
According to the rules of the Medicaid Drug Rebate Program, drug manufacturers are obliged to pay additional rebates in the event the drug’s prices rise beyond a certain amount. As the drug’s price has increased by around $20,000 per unit up to 2013, the lawsuit claims that the drug company has avoided hundreds of millions of dollars in payments by not paying rebates based upon the drug’s price increases up to that time.
Because the firm has failed to remit to Medicare the rebates the lawsuit alleges are owed, Federal prosecutors say the company knowingly violated the Medicaid Drug Rebate Statute, of which they say the defendant firm was repeatedly warned by the federal government.
The filing that began the suit was submitted by a corporate whistleblower pursuant to the qui tam provisions of the False Claims Act (a.k.a. “Lincoln’s Law”). The provision allows whistleblowers to file suit against companies they say are violating the Act, leaving the Federal government to examine the suit and take over prosecution if the find them of merit.
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