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State Wins $1.8 Million Settlement from Drug Manufacturer

State Wins $1.8 Million Settlement from Drug Manufacturer

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SALT LAKE CITY (AP) -- Utah will get $1.8 million from the manufacturers of the allergy drug Claritin.

The money comes as part of a multi-million dollar settlement the drug's manufacturer, Schering Plough, has agreed to pay for overcharging state Medicaid programs.

The settlement is the result of a five-year federal investigation into the company's attempts to market Claritin with large health insurance companies as the drug faced increasingly stiff competition from other allergy drugs.

Prosecutors said that when Cigna Corp., one of the nation's largest health insurers, threatened to switch its patients to other, less expensive medications, Schering-Plough offered the company $10 million in incentives, plus a $1.8 million "data fee" for information did not actually need.

The agreement lowered the price of Claritin for Cigna, but violated a federal law requiring drug makers to give their lowest prices to Medicaid, the government's health program for the poor.

"This settlement demonstrates that we will aggressively pursue drug manufacturers and any other companies that try to take advantage of taxpayers and consumers," said Attorney General Mark Shurtleff in a statement.

The company will pay a total of $282.3 million in civil fines and penalties and $52.5 million to settle claims with the federal government and state Medicaid programs.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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