Organon will pay $34 million to settle allegations that it underpaid rebates to state  Medicaid programs, offered improper financial incentives to nursing home pharmacy companies, promoted its antidepressants for unapproved uses, and misrepresented its drug prices to New York’s Medicaid program.

Organon was headquartered in Oss, Netherlands, and the company’s assets are now owned by Merck.

“Preserving the integrity of our Medicaid Program and weeding out those who seek to defraud it is a top priority for my office,” Attorney General Schneiderman said.  “We will keep fighting to ensure that companies that skirt the law for financial gain will be held accountable.”

The settlement resulted from two whistleblower lawsuits filed in the United States District Court for the District of Massachusetts and the United States District Court for the Southern District of Texas, and resolves four separate allegations:

The government alleged that Organon did not include rebates and discounts in its best price reporting and therefore underpaid rebates owed to the New York Medicaid Program. The federal Medicaid Drug Rebate Program requires that all drug manufacturers which supply products to Medicaid recipients give the Medicaid programs the best price available for that product.

The government alleged that Organon offered nursing home pharmacy companies market share discounts and rebates to encourage the use of Remeron and Remeron SolTab over competing antidepressants, which violated the federal Anti-Kickback Statute and resulted in the submission of false claims to the New York Medicaid program.

The government alleged that Organon promoted the sale and use of Remeron and Remeron SolTab for conditions that were not approved as safe and effective by the Food and Drug Administration (FDA). Specifically, Organon marketed drug side effects as possible benefits and promoted the use of Remeron in children and adolescents.

The government alleged that Organon reported false and inflated prices to New York’s Medicaid program, then offered the drugs at a lower cost as a financial inducement to nursing home pharmacy companies by increasing the spread between the actual cost of the drugs.