Attorney General Patrick C. Lynch announced Friday that, as a result of an investigation by his office’s Medicaid Fraud and Patient Abuse Unit, the state of Rhode Island has received $396,113.22 as part of a settlement with King Pharmaceuticals Inc.
King Pharmaceuticals, a Tennessee-based manufacturer of generic drugs, incorrectly reported drug prices to the federal government for the purpose of instituting rebates due to state Medicaid programs under the federal Medicaid drug rebate statute. Because of these incorrect calculations, Medicaid, as well as other programs that were due rebates from King Pharmaceuticals, were underpaid an estimated $62 million nationwide. A double-damages penalty imposed in this settlement elevated the total settlement figure to $124 million, which will be paid to 49 states as well as the federal government.
As part of this settlement, the state of Rhode Island will receive $396,113.22, with $361,406.41 being paid to the state’s Department of Human Services, which administers the Medicaid Program. A portion of this settlement, $25,000, goes automatically to the federal government.
