Office of the Attorney General
Attorney General Greg Stumbo Announces $4.3 Million Collected from Schering-Plough Corporation for Defrauding Kentucky Medicaid

Press Release Date:  Monday, February 05, 2007  
Contact Information:  Vicki Glass, 502-696-5643 Office  

Attorney General Greg Stumbo announced today that pharmaceutical manufacturer Schering-Plough Corporation, of Kenilworth, New Jersey, has paid $4.3 million in civil damages, fines and penalties for offenses against the Medicaid and Medicare programs. A large portion of the settlement was paid to the federal government, but $1,398,035.06 was paid directly to the Commonwealth.

The settlement arose out of illegal sales and marketing activities that defrauded the Kentucky Medicaid program and the federal Medicare program.  Those activities included reporting fraudulent prices to the federal government to avoid paying Medicaid rebates, making illegal payments to physicians to induce them to prescribe Schering-Plough drugs and illegally promoting Schering drugs for “off-label” uses that had not been approved by the FDA.

Nationally, Schering-Plough also paid a $180 million criminal fine and a $50 million civil recovery for private health plans and insurance companies that were also defrauded by Schering’s illegal marketing activities.  In addition to the monetary payment, a Schering-Plough subsidiary pled guilty to criminal charges and was permanently excluded from Medicare, Medicaid, and all other Federal health care programs.

“My office is pleased to recover this money for the taxpayers of Kentucky,” Attorney General Stumbo said.

The Attorney General’s Medicaid Fraud and Abuse Control Division recovered nearly $4.8 million from Schering in 2004 after the drug giant had been caught lying to the federal government to avoid paying Medicaid rebates.

Stumbo added, “The guilty parties have been permanently barred from preying on Kentuckians. They have learned that we will deal harshly with anyone who cheats Medicaid.”

The Attorney General’s Tip Line for reporting allegations of Medicaid fraud is 1-877-ABUSE-TIP (1-877-228-7384).