North Carolina Department of Justice
North Carolina Department of Justice
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NC to share in $7.3 million Medicaid fraud settlement from Astellas Pharma

Release date: 7/17/2014

Pharmaceutical manufacturer to pay for unlawful marketing of drug, AG announces

Raleigh: North Carolina will share in a $7.3 million multi-state settlement with Astellas Pharma to resolve allegations that the company unlawfully marketed its drug Mycamine, Attorney General Roy Cooper said today.
“Pushing drugs for unapproved uses cheats patients and taxpayers,” Cooper said. “We’re going after these shady marketing schemes to ensure your tax dollars are going to good use.”
North Carolina and the other states allege that Astellas Pharma unlawfully marketed Mycamine for use in children from 2005 to 2010. Mycamine is an antibiotic that fights infections caused by fungus and has only been approved by the Food and Drug Administration (FDA) to treat adult patients. Once the FDA approves a drug for a specific use, the manufacturer cannot legally market the drug for an unapproved use, a practice called off-label marketing.

Cooper contends that Astellas Pharma’s illegal marketing led to the submission of false claims to federal and state health care programs, including North Carolina’s Medicaid program. Medicaid is a joint federal-state program that provides health insurance for the poor.

North Carolina’s share of the settlement is $165,528.55, which includes funds for Medicaid efforts in the state as well as civil penalties that will go to public schools.

The allegations against Astellas Pharma were originally raised in a lawsuit filed by a whistleblower under the False Claims Act and related state false claims statutes, which allow private citizens with knowledge of false claims to bring civil actions on behalf of the government and share in any recovery.

The North Carolina settlement agreement was reached by the Medicaid Investigations Division (MID) of the North Carolina Department of Justice and the North Carolina Division of Medical Assistance. 
The MID investigates fraud and abuse by hospitals, doctors, pharmaceutical companies, mental health care providers, and others, as well as patient abuse and neglect in Medicaid-funded facilities. Over the past decade, Cooper’s MID has recouped more than $500 million and helped to convict hundreds of individuals on criminal charges. 

Media Contact: Noelle Talley 919/716-6413