Drugmaker, CEO agree to pay up to $50M in false claims suit

Nostrum Laboratories and its founder and CEO, Nirmal Mulye, PhD, agreed to pay between $3.8 million and $50 million to settle allegations of underpaying Medicaid rebates. 

Dr. Mulye and Nostrum, a drugmaker located in Missouri and New Jersey, admitted to increasing the price of an urinary tract infection drug more than 400% after changing amounts of two inactive pharmaceutical ingredients, the Justice Department said Oct. 30.

The tweaked recipe was marketed as a "reformulation" and the price of the drug, nitrofurantoin oral suspension, increased from $474.75 to $2,392.32 per bottle in 2018. This "triggered significantly higher Medicaid Drug Rebate invoices from State Medicaid programs," and Nostrum and Dr. Mulye did not pay the entire invoiced amounts, the Justice Department said. 

There was not a legal decision on liability because the case was settled.

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