New HampshireDepartment of JusticeOffice of the Attorney General

News Release

For Immediate Release
November 4, 2015

Karin M. Eckel, Assistant Attorney General,
Director of Medicaid Fraud Control Unit
(603) 271-1246

Attorney General Announces Medicaid Settlement with AstraZeneca Pharmaceuticals and Cephalon

Attorney General Joseph A. Foster announces that New Hampshire has joined with other states and the federal government in a $46.5 million settlement with AstraZeneca Pharmaceuticals, LP (AstraZeneca) and a $7.5 million settlement with Cephalon, Inc., (Cephalon) to settle allegations that AstraZeneca and Cephalon overcharged the state Medicaid programs for drugs. As part of the national settlement, New Hampshire will receive over $238,000 in restitution and other recoveries from AstraZeneca and Cephalon.

Specifically, these settlements resolve allegations that AstraZeneca and Cephalon underpaid drug rebates owed to the states. Under a federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers' drugs. The rebate program is designed to ensure that states pay competitive prices for drugs, and the rebates are calculated based on a percentage of the average prices drug wholesalers pay for each of the drugs. This average price, which the manufacturer reports to the federal government, is known as the Average Manufacturer's Price or "AMP". The greater the AMP reported by the manufacturer, the greater the rebate the manufacturer must pay for that drug. The complaint alleged that AstraZeneca and Cephalon improperly treated certain fees paid to wholesalers as "discounts," and that the effect of this accounting practice was to falsely decrease the AMP the companies reported to the federal government, improperly decreasing the rebates paid to the states.

A National Association of Medicaid Fraud Control Units (NAMFCU) team participated in the investigation and conducted settlement negotiations with AstraZeneca and Cephalon on behalf of the states.

New Hampshire Department of Justice
1 Granite Place South | Concord, NH | 03301
Telephone: 603-271-3658