The U.S. Department of Justice recently announced that Bristol-Myers Squibb (BMS) agreed to pay $75 million, plus interest, to resolve allegations that it knowingly underpaid rebates owed under the Medicaid Drug Rebate Program (MDRP). Of that total, $41 million plus interest will be paid to the federal government and the remainder to various state Medicaid programs.

Under the MDRP, drug manufacturers that wish to make their drugs available to Medicaid beneficiaries must pay quarterly rebates to state Medicaid programs. Rebate amounts are based in part on the Average Manufacturer Price (AMP) of each drug. The settlement resolves allegations, made by a whistleblower in a lawsuit filed in 2018 under the False Claims Act, that BMS underreported AMPs in order to pay lower quarterly rebates.

Unusually, the plaintiff continued to pursue the case and was able to secure a settlement even though the federal government declined to intervene in the action brought on its behalf.