SACRAMENTO (CBS SF) – California Attorney General Xavier Becerra announced a nationwide settlement totaling over $10 million with two major pharmaceutical companies on Tuesday.
Becerra’s office said they reached the settlement with jointly-held Royal Pharmaceuticals and Seton Pharmaceuticals, also known as Royal/Seton, after the companies disclosed an error that led to the underpayment of Medicaid drug rebates to all 50 states from 2013 through 2017.
According to Becerra’s office, Royal/Seton inadvertently reported inaccurate data regarding two topical steroids the companies manufacture. The error led the Centers for Medicare and Medicaid Services to calculate a lower rebate amount. In September 2017, the companies self-reported the error to the North Carolina Medicare Fraud Control Unit.
“Cheating a program like Medi-Cal, which provides health insurance for many of California’s most vulnerable residents, is never okay,” said Becerra, who has been nominated by President-elect Joe Biden to be his Health and Human Services Secretary.
“However, when drug manufacturers come forward and report the companies’ error, we’re able to right the wrong and get the money back to the Medi-Cal program where it belongs,” the attorney general went on to say.
Under the settlement, California’s share is $410,192.05. The federal government is slated to receive $164,080.33 of that amount, while the remaining $246,111.72 is being returned to the state’s Medi-Cal program.
The settlement with Royal/Seton followed an $18.9 million settlement with Memorial Health Services after the health system revealed it had overcharged Medi-Cal for prescription drugs over a three-year span.