Schering-Plough settles with aggressive prosecutors for bilking Medicaid

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Schering-Plough Corp. settled $346 million with Pennsylvania prosecutors, who accused the pharmaceutical company of overcharging for drugs sold through Medicaid and then giving private providers kickbacks. The Kenilworth, NJ-based company also pleaded guilty to a federal criminal charge that it paid a $1.8 million kickback to a health maintenance organization that threatened to drop its drug Claritin because of its high cost.

Prosecutors for the Eastern District of Pennsylvania, who began investigating the allegations in 1999 based on accusations from whistle-blowers, are particularly aggressive in finding firms they believe rip off Medicare and Medicaid.

The fine includes $52.5 million in criminal charges and civil damages of $293 million. Some of those damages, though, will be offset by credit the company will receive for $53.6 million in Medicaid rebates that it has previously paid.