(WASHINGTON) -- The Justice Department announced a $421 million settlement against three pharmaceutical companies on Tuesday for their alleged involvement in a scheme to drastically inflate the price of drugs --sometimes by a whopping 1,000% -- which was reimbursed by Medicare and Medicaid and, ultimately, the U.S. taxpayer.
The settlements were reached in three False Claims Act cases filed against Abbott Laboratories, B. Braun Medical Inc. and Roxane Laboratories. Both B. Braun and Roxane are U.S. subsidiaries of German pharmaceutical firms.
Under the settlement agreements, Abbott Laboratories agreed to pay $126.5 million in fines, B. Braun Medical agreed to pay $14.7 million, and Roxane will pay $280 million for making Medicare and Medicaid pay the allegedly inflated reimbursements.
The investigation into the companies' activities followed a whistleblower lawsuit filed by Ven-A-Care, a home infusion company based in southern Florida. A civil complaint against Abbott filed by Ven-A-Care in 2007 noted that Abbott was charging huge mark-ups on the price of their drugs when they sought reimbursement from the government.
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