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    Rutledge Announces Settlement with Accredo Pharmacy

    August 13, 2015

    LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that a settlement has been reached to resolve kickback allegations against Accredo Health Group Inc. The agreement resolves claims that Accredo recommended the drug Exjade to Medicaid patients in exchange for kickbacks from Novartis Pharmaceuticals Corp., which markets the drug.

    Under the terms of the settlement, Accredo has agreed to pay $60 million to the federal government and over $40 million to States. Arkansas has received $141,202.35 under the settlement deposited into the Medicaid Program Trust Fund.

    “Accredo used so-called health care professionals to encourage patients to continue taking a drug with severe side effects so that it could continue receiving high-dollar fees and rebates,” said Attorney General Rutledge. “Accredo simply ignored the health and well-being of its patients.”

    When Novartis launched Exjade, it created a closed distribution network, consisting of three pharmacies, through which most Exjade prescriptions in the United States were filled. As a result, Novartis controlled which pharmacy filled many of the prescriptions for Exjade. The settlement resolves allegations that Accredo participated in a scheme in which Novartis paid kickbacks to pharmacies by giving more prescription referrals to the pharmacy that kept patients on Exjade the longest.

    Accredo, a specialty pharmacy headquartered in Memphis, Tennessee, and a wholly owned subsidiary of Medco Health Solutions Inc. ships prescription drugs to Medicaid patients around the country. Exjade was approved by the U.S. Food and Drug Administration in 2005 for the treatment of chronic iron overload due to blood transfusions. In complaints filed in the case, several States and the federal government have alleged that Novartis developed the scheme because Exjade patients often stopped taking the drug because of side effects.

    The settlement stems from a whistleblower lawsuit, U.S. ex rel. Kester, et al. v. Novartis Pharmaceuticals Corporation, et al., which is pending in federal court in New York. The case was filed under the federal False Claims Act and similar State false claims acts.

    The state settlements were negotiated by a team of States led by representatives from the Offices of the Attorneys General for California and New York.

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