Attorney General Dustin McDaniel Announces $3.2 Million Settlement in Fraud Case

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February 08, 2007

LITTLE ROCK- Attorney General Dustin McDaniel announced today that pharmaceutical manufacturer Schering-Plough Corporation of New Jersey, has paid $3.2 million in civil damages, fines and penalties for offenses against the Medicaid and Medicare programs. While the majority of the settlement went to the federal government, $986,902.18 was paid directly to the State of Arkansas.

The recent settlement resulted from illegal sales and marketing activities that defrauded the Arkansas Medicaid program and the federal Medicare program. Those activities included reporting fraudulent prices to the federal government to avoid paying Medicaid rebates, making illegal payments to physicians to induce them to prescribe Schering-Plough drugs and illegally promoting Schering drugs for "off-label" uses that had not been approved by the FDA.

Nationally, Schering-Plough also paid a $180 million criminal fine and a $50 million civil recovery for private health plans and insurance companies that were also defrauded by Schering's illegal marketing activities. In addition to the monetary payment, a Schering-Plough subsidiary pled guilty to criminal charges and was permanently excluded from Medicare, Medicaid, and all other Federal health care programs.

"Fraud in any form will not be tolerated by this office," said McDaniel. "I hope that as a result of this investigation, Arkansans will be safer and other companies will be deterred from attempting to defraud Arkansas."

The Attorney General's Tip Line for reporting allegations of Medicaid fraud is 1-866-810-0016.
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