The drug company Sanofi-Pasteur has agreed to pay the Department of Veterans Affairs $20 million for massively overcharging on drug prices.
Sanofi-Pasteur, the vaccines division of Sanofi-Aventis, incorrectly calculated drug prices in two big contracts, leading to overcharging of $19,868,194, the Department of Justice announced Monday. Now, the VA is set to receive those funds back.
“It is important that pharmaceutical companies provide complete, accurate, and current information to the VA about the pricing of their drugs,” said Acting Assistant Attorney General Chad A. Readler said in a statement. “The Department of Justice will ensure that pharmaceutical companies follow the rules for drug pricing when selling to the government.”
According to the Veterans Health Care Act, drug companies are prohibited from charging more than the Federal Ceiling Price for certain drugs. But Sanofi-Pasteur sidestepped this and admitted to the VA it had done so, which led the VA inspector general to launch an investigation. The inspector general determined that Sanofi-Pasteur’s practice of overcharging extended all the way back to 2002.
“Overcharging VA depletes funds that are available to care for our veterans,” said Director of the Healthcare Resources Division Mark Myers from the inspector general’s office. “We will continue to hold companies accountable for errors in drug pricing.”
Not only does Sanofi-Pasteur have to pay $19.8 million, but the drug company said it won’t try to obtain reimbursement for any cases where it ended up selling drugs to the VA at a lower price than the Federal Ceiling Price.
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