Coloplast, the Danish medical device maker with U.S. headquarters in Minneapolis, has agreed to pay the federal government $600,000 to settle allegations that it missed multiple deadlines for submitting price data to the Medicaid program.
It's a condition of participation in state-run Medicaid programs that companies selling drugs prescribed to Medicaid outpatients also provide the government with accurate and timely pricing data, which is used to calculate rebates that the drugmakers are required to pay to the program.
Although Coloplast is mainly known for medical devices like urinary catheters and ostomy supplies, it also sells therapeutic skin-care lotions and ointments to cleanse, moisturize and protect the skin, which are covered by the Medicaid price-data rules. Coloplast skin-care products are manufactured in Mankato.
In the settlement agreement, which was executed last month and obtained this week via Freedom of Information Act request, Coloplast executives agreed to pay $600,000 to resolve the allegation that the company failed to provide "timely or accurate" reports on a monthly and quarterly basis regarding its average prices and sales volumes.
The periods covered by the settlement include 2013, 2014 and 2015.
Coloplast officials said Thursday they regretted that any reporting deadlines were missed.
"Our team has taken the necessary steps to ensure outstanding reports have been submitted, and that going forward, all compliance timelines are met," a company spokesman said in an e-mailed statement. "Submitting timely, accurate information is a priority for Coloplast, and we are committed to meeting and exceeding all regulatory requirements."
The allegation against Coloplast was filed by the inspector general's office of the U.S. Health and Human Services Department (HHS), which has authority to impose civil monetary penalties in cases where drug manufacturers run afoul of the Medicaid drug rebate program.
The mandatory rebate program covers about 600 drug companies, which are required to pay Medicaid as much as 23 percent of the average manufacturer's price for prescribed outpatient drugs in order to have their drugs eligible to be prescribed to Medicaid outpatients.
The payments are shared among federal and state governments to offset the cost of the drugs, according to the federal Medicaid website.
The HHS inspector general's website lists four other cases in the past year in which drug companies paid settlements for failing to meet the reporting requirements in the drug rebate program; the settlements ranged in size from $91,000 to $2.8 million.