A pharmaceutical company and its chief executive — who once defended Martin Shkreli for raising drug prices to controversial heights — agreed to pay up to $50 million to settle allegations of purposely underpaying Medicaid rebates.
Nostrum Laboratories and its founder, Nirmal Mulye, violated the False Claims Act by underpaying rebates that were due for an antibiotic used to treat bladder infections, according a document released by the U.S. Department of Justice. And this came after the company claimed to have reformulated the medicine and then boosted the price by more than 400%.
Mulye is hardly a household name, but he raised a ruckus five years ago by saying he had “a moral requirement to make money… sell the product at the highest price.” And he claimed that Shkreli — who became infamous for pharmaceutical price-gouging — was right to do so because shareholders must be rewarded. U.S. authorities, though, claimed Mulye and Nostrum pocketed too much of the price hike.