On April 1, 2021, the DOJ announced in a PRESS RELEASE that Bristol-Myers Squibb (“BMS”) had agreed to pay the United States and participating states a total of $75 Million, plus interest, to resolve allegations that it knowingly underpaid rebates owned under the Medicaid Drug Rebate Program (“MDRP”)*.
Relator, Ronald Streck, initiated the current civil lawsuit in the Eastern District of Pennsylvania, under the whistleblower provisions of the False Claims Act, as well at multiple state false claims acts. The government declined intervention of this matter, and the relator and his counsel proceeded with the case.
Pursuant to the Medicaid Drug Rebate Program (“MDRP”), drug manufacturers are required to pay quarterly rebates to state Medicaid programs in exchange for Medicaid’s coverage of the manufacturers’ drugs. The quarterly rebates are based, in part, on the Average Manufacturer Prices (AMPs) that the manufacturers report to the government for each of their covered drugs. Generally, the higher the reported AMP for a drug, the greater the rebate the manufacturer pays to state Medicaid programs for the drug. This settlement resolves allegations that BMS underreported AMPs for a number of its drugs by improperly reducing the reported AMPs for service fees paid to wholesalers, and by improperly excluding from the reported AMPs additional value it received pursuant to price appreciation provisions in its contracts with wholesalers. As a result, BMS allegedly underpaid quarterly rebates owed to the states and caused the United States to be overcharged for its payments to the states for the Medicaid program.
*The claims resolved by this settlement are allegations only; there has been no determination of liability.