Nostrum agrees to $50M settlement with DOJ over allegations of underpaying Medicaid

Mis­souri-based phar­ma Nos­trum Lab­o­ra­to­ries and its CEO have agreed to pay a min­i­mum $3.8 mil­lion and up to $50 mil­lion to set­tle ac­cu­sa­tions from the US De­part­ment of Jus­tice that the com­pa­ny vi­o­lat­ed the False Claims Act.

Ac­cord­ing to the DOJ, Nos­trum and its CEO were “know­ing­ly un­der­pay­ing Med­ic­aid re­bates due for Nos­trum’s drug Ni­tro­fu­ran­toin Oral Sus­pen­sion” af­ter hik­ing up the price of the an­tibi­ot­ic. The set­tle­ment could go up to $50 mil­lion if cer­tain fi­nan­cial con­tin­gen­cies are met, though the de­part­ment did not spec­i­fy the con­tin­gen­cies.

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