Bristol Myers Squibb pays $75M to resolve claims it underpaid rebates to Medicaid

Bristol Myers Squibb agreed to pay the U.S. and participating states $75 million to settle allegations it knowingly underpaid the Medicaid Drug Rebate Program, the Department of Justice announced April 1.

The settlement resolves a 2013 whistleblower lawsuit, for which the government declined intervention, brought by pharmacist and lawyer Ronald Streck.

Under the Medicaid Drug Rebate Program, drugmakers are required to pay quarterly rebates to state Medicaid programs so that such programs can offer coverage for their products. The rebates are partially based on the average manufacturer prices drugmakers report, which Mr. Streck alleged Bristol Myers Squibb was underreporting so it could pay lower rebates.

The drugmaker will pay about $41 million to the federal government, and the rest will be paid to states participating in the settlement.

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