Drug maker fined $19.8 million for overcharging the VA

The Department of Veterans Affairs (VA) has been overcharged for several drugs for nearly a decade, resulting in a steady decrease of financial resources that should have gone to veterans’ care. A French pharmaceutical company will pay $19.8 million in fines to resolve allegations that it incorrectly billed the VA for certain medications.

“Overcharging VA depletes funds that are available to care for our veterans,” said Mark Myers, director of the VA Healthcare Resources Division. “We will continue to hold companies accountable for errors in drug pricing.”

Pennsylvania-based Sanofi-Pasteur, the vaccine unit of drug maker Sanofi, overcharged the VA for two medications from 2002 to 2011. According to the Department of Justice, the error occurred after the company incorrectly calculated the federal ceiling cost, or maximum amount, for covered drugs. Under the Veterans Health Care Act, drug manufacturers are not allowed to charge the VA in excess of the ceiling price for medications.

In 2012, Sanofi Pasteur voluntarily notified the VA about the accounting errors after learning that it had incorrectly calculated the price for several drugs between 2007 and 2012. The VA’s Office of Inspector General launched a subsequent investigation in which it discovered the overcharges actually dated back to 2002.

Sanofi Pasteur released a statement saying it had fully cooperated with investigators and “negotiated in good faith with the government.” The drug maker also agreed not to seek reimbursement for miscalculations that caused the company to undercharge the VA.