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Nassau may get $500G in Medicaid fraud suit

Nassau County attorney John Ciampoli (February 18, 2011)

Nassau County attorney John Ciampoli (February 18, 2011) Photo Credit: Howard Schnapp

Cash-strapped Nassau County is poised to collect nearly $500,000 as part of a class-action suit alleging that 40 pharmaceutical companies participated in widespread Medicaid fraud.

The Nassau County Legislature is expected to approve a settlement Monday with New Jersey-based drugmaker Sandoz Inc. for more than $258,000, according to County Attorney John Ciampoli. Another settlement, with New Jersey-based Par Pharmaceuticals, for just over $235,000 will be voted on by the legislature in the coming weeks as attorneys finish the details, Ciampoli said.

"This is a good day for Nassau County," Ciampoli said. "It will not be a panacea for everything that ails Nassau's budget, but we were able to recover for the county."

Nassau was one of 42 New York counties to file suit in U.S. District Court in Massachusetts in 2007, alleging Medicaid fraud against pharmaceutical manufacturers and their subsidiaries. The federal government and more than 20 other states filed similar lawsuits.

The New York case claims that between 1997 and 2005, drugmakers artificially inflated prices for prescription medication, causing the state to overpay providers for drugs purchased through Medicaid. New York counties are obligated to reimburse the state for 50 percent of the state's Medicaid costs.

"Although we feel strongly that . . . claims brought against the company are unfounded, Sandoz Inc. has reached an agreement to settle with the state of New York in order to avoid the expense and uncertainty of protracted litigation," a company statement said.

Par Pharmaceuticals did not return calls for comment.

Nassau has settled with all but three of the drug companies, netting about $1.6 million to date, although some of that has yet to be collected, Ciampoli said. He could not say what percentage of the funds would go toward paying private attorneys representing the county in the case.

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