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to determine a rebate to the government. By reporting an artificially high best pnce, the

Defendant Manufacturers were able to report and pay artificially low rebates, costing the

government millions of dollars.

234.

At all relevant times, the Defendant Manufacturers knew providing kickbacks to

Omnicare that dramatically lowered the prices of their "preferred" medications required the

Defendant Manufacturers to report these lower best prices paid by Omnicare for their preferred

medications to the government, which would have resulted in the Defendant Manufacturers

paying greater rebates to all states' Medicaid Programs.

235.

The artificially high best price reported by the Defendant Manufacturers through

their suppression of the kickbacks-for-switches scheme and resulting actual best price afforded to

Omnicare resulted in false claims to many other federal agencies that buy drugs. The federal

government utilizes best price reporting to set prices for PHS/340b entities and the Federal

Supply Schedule. Because the Defendant Manufacturers repolied an artificially high best price,

these entities ended up paying millions more for these medications than they would have had the

Defendant Manufacturers reported the proper best price information.

236.

The pricing records the Defendant Manufacturers were required to submit under

federal law on a regular basis were therefore material to the determination of prices on thousands

of different transactions between Defendant Manufacturers and the government.

237.

The

CMS

has

advised

in

a document

created

on

November

28,

2005

and

last

updated on February 6, 2006, that under the Medicare Modernization Act, rebates paid to long

term care pharmacies that participate in Medicare Part D "would affect the best price

calculation" under Section 1860D-2(d)(l )(C).

238.

Defendant

Manufacturers

were

trying

to

avoid

the

obligation to

pay

increased

64

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