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Another drug maker settles FCA suit

By Phillips & Cohen LLP

Dey, a pharmaceutical manufacturer, has become the fourth drug maker this month to settle allegations involving reporting false and inflated drug prices.

Payment from the Medicare and Medicaid programs was based on the false inflated prices and, as a result, the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.

Dey will pay $280 million to settle the False Claims Act suit. On Dec.7, 2010, the Department announced settlements totaling $421.1 million involving similar allegations against three other manufacturers: Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc.

The difference between the inflated amount the government paid and the actual price paid by health care providers for a drug is referred to as the ?spread.? The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government.

Full post as published by False Claims Act - Qui Tam on December 21, 2010 (boomark / email).