Drug maker Schering-Plough Corp. has agreed to pay $350 million in fines and plead guilty to criminal charges that it cheated the Medicaid health program for the poor, The New York Times reported on Friday.
The settlement, which would be subject to final approval from a judge, is expected to be announced with federal prosecutors in Philadelphia next week, the newspaper said, citing unspecified people involved in the case.
Schering-Plough spokesman Robert Consalvo declined to comment on the report to Reuters. A spokesman for Patrick Meehan, the U.S. attorney in Philadelphia, could not immediately be reached for comment.
The expected settlement stems from a six-year probe prompted by three whistle-blowers who accused Kenilworth, New Jersey-based Schering-Plough of selling its products to private health-care providers for far less than it sold them to Medicaid, the Times said.
Schering-Plough is expected to admit it gave grants to the private providers to conduct patient education and marketing programs as part of a scheme to induce them to buy the company's drugs at relatively high prices, the newspaper said, citing a person involved in the investigation and another informed of the settlement negotiations.
Schering-Plough then billed Medicaid at these high prices — without giving the offsetting grants, according to the newspaper.
The case is part of a stepped-up effort by U.S. attorneys and states to investigate the pharmaceutical industry's marketing practices. In the biggest U.S. Medicaid fraud case to date, Bayer AG last year agreed to a $257 million settlement with U.S. prosecutors.
