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Yesterday, The Boston Globe reported that Merck, the nation’s second-largest pharmaceutical company based in Whitehouse Station, New Jersey, has agreed to pay Massachusetts’ Medicaid program to settle civil charges that it over-charged for certain drugs. The settlement of the years long “largest, single Medicaid fraud case in Massachusetts history” involved 13 drug companies which had inflated prices for medicines sold in pharmacies.

Massachusetts had already recovered $23.4 million from the other drug companies involved. Massachusetts could have settled with Merck for under $2.5 million in 2009, but chose to continue to pursue the lawsuit which was originally brought in 2003. Originally, the suit named Warrick Pharmaceuticals Corp., a generic drug company whose parent company was the former Schering-Plough Corp. Warrick was acquired by Merck for $41 billion in 2009. Merck’s spokesman Ron Rogers indicated Merck did not admit wrongdoing or liability in the settlement, but merely desired to put the case behind them.

Massachusetts Attorney General Martha Coakley noted the Medicaid Fraud Division of her office was holding pharmaceutical companies accountable for defrauding the taxpayers. “Companies will charge what they can as long as they feel they can get away with it,” and vowed that Massachusetts was going to keep a close watch on how taxpayers’ money was spent. Many states use reporting services to make sure the states properly reimbursing pharmacies that fill prescriptions. Insurance companies also rely heavily on reporting services, as well. We commend the Massachusetts AG and advocate tracking fraud, abuse and waste in business-government relationships. The other 12 companies which settled with Massachusetts previously were: “Mylan Inc., Par Pharmaceutical Inc., Actavis Elizabeth LLC, Dey Inc., Barr Laboratories Inc., Duramed Pharmaceuticals Inc., Ethex Corp., Teva Pharmaceuticals USA, Ivax Corp., Roxane Laboratories Inc., Watson Pharma Inc., and Watson Pharmaceuticals Inc.”

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