Novartis’ generics unit Sandoz will be forking out $12.64 million to settle allegations it misrepresented drug pricing data to the US Medicare programme – the largest ever such settlement.
The firm allegedly misrepresented the average sales price information it was required to give the Centres for Medicare & Medicaid Services during the period January 2010 and March 2012.
The CMS uses this information to set payment amounts for most drugs covered under Medicare Part B. Inaccurate pricing information can cause Medicare to overpay for these drugs. Pricing data is also used to calculate rebates that manufacturers pay to the States in connection with the Medicaid programme.
“Sandoz’s misrepresentations undermined the integrity of the Medicare Part B drug pricing system,” said the HHS Office of Inspector General chief counsel, Gregory Demske.
He added: “The Medicare programme relies on drug manufacturers to accurately report pricing information. We hope today’s settlement reinforces for these companies the importance of taking their drug price reporting responsibilities seriously. We will continue to penalise manufacturers that misrepresent or fail to timely file the required information.”
Sandoz has denied any liability or wrongdoing, saying in a statement: “Sandoz continues to be committed to providing high-quality, affordable medicines to US patients and conducting business with customers and the government with integrity.”
The settlement also includes a certification by the company that it has established a government pricing compliance programme.
This is not the first time Sandoz has been stung by a civil monetary penalty – in December 2011 the company paid $230,000 to settle a case for late reporting of drug information to the CMS.