For Immediate Release - November 08, 2010

Attorney General Martha Coakley's Office Announces $2.6 Million Settlement with Drug Manufacturer in False Claims Act Case

BOSTON - Attorney General Martha Coakley's Office announced today that Mylan Inc., a Canonsburg, Pennsylvania pharmaceutical manufacturer, has paid over $2.6 million to the Commonwealth to settle a Massachusetts False Claims Act case pending in United States District Court in Boston. The lawsuit alleged that Mylan, through its wholly-owned subsidiary, Mylan Pharmaceuticals Inc., reported false and inflated prices to drug industry price reporting services, which caused the Massachusetts Medicaid Program to pay inflated amounts for ingredient costs on prescriptions for Medicaid recipients. The monies recovered will be returned to the Massachusetts Medicaid Program, MassHealth.

"The Massachusetts Medicaid Program provides vital health care services to thousands of poor, elderly and disabled Massachusetts residents. This settlement is a step forward in our efforts to correct false price reporting," Attorney General Coakley said. "Our office will continue to work with MassHealth and the federal government to maintain the integrity of the pharmaceutical reimbursement program and ensure that it is fair to all parties."

Mylan is one of 13 generic drug manufacturers the Commonwealth sued in 2003 for allegedly falsely inflating the prices they reported to national pharmaceutical price reporting services. The Commonwealth's Medicaid Program, like virtually all Medicaid programs nationwide and thousands of private health insurance plans, uses prices reported by pharmaceutical manufacturers to national price reporting services to determine what it will pay to pharmacies for ingredient costs in connection with prescription drugs. The Commonwealth alleged that by reporting the false and inflated prices, the pharmaceutical companies caused the Medicaid Program to pay inflated amounts for ingredient costs for prescriptions for Medicaid recipients. Medicaid is a joint federal-state program which provides healthcare services, including prescription drugs, to low income and disabled persons.

The settlement resolves the Commonwealth's claims related to drugs that Mylan manufactured and sold during the years 1998 to 2003, including Clozapine, Phenytoin Sodium and Lorazapam. In agreeing to the settlement, Mylan did not admit any wrongdoing.

The Commonwealth has previously settled with ten other defendants in this case--Dey, Inc.; Barr Laboratories, Inc.; Duramed Pharmaceuticals, Inc; Ethex Corporation; Roxane Laboratories, Inc.; Teva Pharmaceuticals USA, Inc.; Ivax Corporation; Watson Pharma, Inc. (f/k/a Schein Pharmaceutical Inc.); Watson Pharmaceuticals, Inc.; and Actavis Elizabeth LLC (f/k/a Purepac Pharmaceutical Co.)--recovering a total of $20.3 million from those ten companies for the Medicaid program. On September 30, 2010, AG Coakley's Office won a $4.6 million verdict from a jury in federal court in Boston against Merck & Co. (f/k/a Schering-Plough Corporation) as part of this case. The case remains pending against one other defendant, Par Pharmaceutical, Inc of Spring Valley, N.Y.

Attorney General Coakley's Medicaid Fraud Division works to prevent and prosecute provider fraud and violations of state law in the administration of the Medicaid program. Since Attorney General Coakley took office in 2007, the Medicaid Fraud Division has recovered over $175 million for the Massachusetts Medicaid program.

This case was prosecuted by Assistant Attorneys General Peter A. Mullin, Nathaniel Yeager, Robert P. Patten, Colleen A. McCarthy, John Pina III, Gregory H. Matthews, Robyn P. Dollar and Steven T. Sharobem, with assistance from Investigators Anthony Megathlin, John J. Walsh and Steven Devlin, all of Attorney General Coakley's Medicaid Fraud Division, and with the cooperation and assistance of the MassHealth Pharmacy Program and its staff.

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