Guest guest Posted July 30, 2004 Report Share Posted July 30, 2004 Welcome, 25sea [sign Out] Money Manager - My View - Customize Financial News Enter symbol(s) BasicPerformanceReal-time MktDetailedChartResearchOptionsOrder Book Symbol Lookup Duncan, Regards, Tom ReutersUPDATE - Schering-Plough pleads guilty to Medicaid fraudFriday July 30, 11:32 am ET By Toni e (Recasts lead, adds details on case, payments) NEW YORK, July 30 (Reuters) - Drugmaker Schering-Plough Corp. (NYSE:SGP - News) said on Friday it has agreed to plead guilty to defrauding the Medicaid insurance program and will pay $345.5 million to the federal government in fines and damages. ADVERTISEMENT Under the agreement with the U.S. Attorney's Office in Philadelphia, Schering-Plough will plead guilty to one federal criminal charge that it paid kickbacks to two health maintenance organizations and pay a fine of $52.5 million. It will also pay $293 million in civil damages to cover the loss suffered by Medicaid. Schering-Plough said the amounts will be paid out of legal reserves it previously set aside. Schering-Plough admitted paying cash and other incentives to HMOs operated by Cigna Corp. (NYSE:CI - News) and PacifiCare (NYSE:PHS - News) to keep its allergy drug Claritin on their list of approved medicines. The incentives meant the actual price paid by the HMOs for the drug was lower than the price officially charged to them. Federal prosecutors in the legal documents said Schering-Plough had violated federal law by failing to provide its lowest price on the same drug to Medicaid, the government health program for the poor. The company said it will be credited with $53.6 million that was previously paid in additional Medicaid rebates against the civil damages it must pay. Of the remaining $291.9 million in fines and damages, $177.5 million will be paid this year and the remainder by March 4, 2005. Schering-Plough has been mired in a sea of legal problems, accentuated by the decline of its revenue since Claritin lost patent protection in 2002. The cases were filed in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia. Shares of Schering-Plough were down 6 cents at $19.47 in late morning trade on the New York Stock Exchange. Quote Link to comment Share on other sites More sharing options...
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