Colorado will receive a share of a $95.5 million pharmaceutical settlement

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Colorado will receive more than $376,000 as part of a $95.5 million global settlement with Aventis Pharmaceuticals.

The agreement resolves allegations that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the agreement, state Medicaid programs throughout the country received a total of approximately $40 million.

“Colorado’s share of the Aventis settlement is a significant recovery for our state,” Suthers said. “This settlement sends a clear message to other pharmaceutical companies that Colorado will not tolerate conduct that threatens the integrity of its Medicaid program.”

Under federal Medicaid drug-rebate law, Pharmaceutical manufacturers are required to give the same prices to state Medicaid programs that they give to their best customers. When a state Medicaid program pays more than the best possible price, the manufacturers are required to issue a rebate for the difference.

According to the allegations, Aventis entered into “private label” agreements with Kaiser Permanente, a large health maintenance organization, to avoid reporting the best price for these drugs that would have obligated it to pay millions of dollars of drug rebates to Medicaid. Aventis repackaged its drugs under Kaiser’s private label, resulting in the underpayment of drug rebates to the Medicaid program and to several federal health programs.