GlaxoSmithKline has agreed to $150 million to settle allegations it overcharged the government for two antinausea drugs.
This is the latest in a series of suits brought by whistle-blowers against drug companies that the Associated Press says have resulted in $2.4 billion in recoveries by the government.
Glaxo engaged in a scheme to inflate the price of Zofran and Kytril for the Medicare and Medicaid programs, which reimburse healthcare providers based on the manufacturers’ prices. Healthcare providers who administered the drugs were charged were charged a lower price and pocketed the difference. This made them more likely to prescribe the drug again.
The Boston Globe ran the AP story on September 21, 2005.