A settlement has been reached to resolve allegations of drug overcharges to the Department of Veterans Affairs against Sanofi Pasteur.
The allegations arose from a lawsuit that claimed Sanofi Pasteur incorrectly calculated drug prices and thereby overcharged the U.S. Department of Veterans Affairs (VA) for drugs under two contracts between 2002 and 2011.
The Veterans Health Care Act mandates that pharma companies charge the so-called federal ceiling price (FCP) for their drugs. The FCPs for certain drugs are exactly what Sanofi Pasteur miscalculated in this case.
“It is important that pharmaceutical companies provide complete, accurate, and current information to the VA about the pricing of their drugs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will ensure that pharmaceutical companies follow the rules for drug pricing when selling to the government.”
Sanofi Pasteur has paid millions to resolve False Claims Act allegations. In 2012, the company paid over $109 million in a False Claims Act investigation regarding its knee injection, Hyalgan. Allegedly, the company used free samples as kickbacks to lower the drug’s effective price, to avoid cutting its actual invoiced price and trigger lower reimbursements.
Reportedly, in addition to paying approximately $19.8 million, Sanofi Pasteur has agreed that it will not pursue claims for reimbursement for sales where it contends its error in calculating the FCP resulted in a lower price to the VA.
