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Akorn must pay $7.9M settlement for Medicare false claims

In a settlement with the Department of Justice (DOJ), pharmaceuticals maker Akorn Operating Company agreed to pay $7.9 million for continuing to market three medications via Medicare after they were no longer covered by the program.

According to the settlement agreement released on Wednesday, Akorn, of Illinois, gained FDA clearance to make three generic medications—Diclofenac, Olopatadine, and Azelastine—available to patients through Medicare, the government health program for seniors. The DOJ's case originated from a whistleblower action filed by Albermarle LLC in June 2021 in the U.S. District Court for the District of Massachusetts in accordance with the False Claims Act's qui tam provisions.

Generic prescription pharmaceuticals are less priced versions of brand-name prescription medications. By submitting conversion petitions to the FDA, pharmaceutical companies can change their brand-name prescription medications to over-the-counter (OTC) medications. When the brand-name medication converts, any prescription generic counterparts must likewise become OTC medications.

Once a medicine loses its prescription designation, it can no longer be sold through Medicare because OTC medications are not covered by the program.

The FDA authorized Diclofenac and Olopatadine brand-name counterparts to be sold over-the-counter (OTC) in February 2020. Azelastine received OTC approval in June 2021.

According to the DOJ, Akorn did not immediately provide OTC designation to its three generic medications. Instead, the government claims that Akorn continued to market the pills as prescription pharmaceuticals and charge Medicare for them.

Diclofenac OTC conversion and Olopatadine OTC conversion applications from Akorn were submitted to the FDA in March 2021 and January 2021, respectively. In January 2022, it applied for permission to take Azelastine off the market.

According to the settlement, Akorn acknowledged to the DOJ that it purposefully delayed changing the status of its three generic medications from Rx-only to OTC status and instead continued billing Medicare for them "because it believed that continuing to sell each as purportedly Rx-only would be more profitable for the company."

Akorn will contribute around $5.1 million of the entire $7.9 million in reparations. From the total, Albermarle will earn around $947,000. The DOJ considered how well Akorn cooperated with their inquiry.

Akorn did not respond right away when asked for comment.



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