US recovered $1.34b from settlements of fraud cases

WASHINGTON - The United States recovered $1.34 billion to resolve claims of fraud against the government in fiscal 2008, obtaining settlements from companies including Merck & Co., Cephalon Inc., and Amerigroup Corp., the Justice Department said.

The government has recovered more than $21 billion in settlements and court judgments since 1986, when Congress boosted the government's authority to bring such cases under the False Claims Act, the Justice Department said yesterday.

The total for the 2008 fiscal year that ended Sept. 30 compares with $2 billion a year earlier.

About $1.1 billion of the fiscal 2008 judgments and settlements came from cases related to healthcare fraud, Justice said.

Another $133 million resulted from defense-contracting fraud allegations.

In February, Whitehouse Station, N.J.-based Merck agreed to pay more than $650 million to settle accusations it failed to pay the correct rebates to Medicaid.

The settlement covered allegations that Merck provided discounts to hospital officials to administer the drugs Zocor, Vioxx, and Pepcid instead of other brands, and that the company didn't report the discounts to reflect its "best price" under Medicaid.

Cephalon said in September it would pay $258 million to settle allegations the Frazer, Pa.-based company marketed three drugs - Actiq, Gabitril, and Provigil - for uses other than those approved by the Food and Drug Administration.

Amerigroup, based in Virginia Beach, Va., agreed in August to pay $225 million to settle claims it deferred enrolling pregnant women and other high-cost patients from its managed-care program in Illinois, illegally increasing profits.