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3 firms settle alleged inflated Medicare, Medicaid claims

By Terry Frieden, CNN Justice Producer
  • Government alleged firms jacked up the price on which payments were based
  • Settlement is worth $421 million

Washington (CNN) -- Three large pharmaceutical firms have agreed to pay a total of $421 million to settle allegedly inflated claims against the Medicare and Medicaid programs, the Justice Department announced Tuesday.

Abbott Laboratories, Roxane Laboratories and B. Braun Medical Inc. have agreed to settle with the government to resolve claims that they engaged in a complicated scheme to report inflated prices for many pharmaceutical products.

Assistant Attorney General Tony West said the settlements stem from allegations the firms jacked up the prices of the "average wholesale price" upon which the government relied for determining payments.

West said the settlements bring to a record $9 billion the amount of recoveries for fraud in the two years of the Obama administration. More than half of that has been for health care related fraud.