States make plans for share of GlaxoSmithKline settlement

The penalty that drugmaker GlaxoSmithKline must pay for unlawfully marketing drugs for uses not approved by the Food and Drug Administration means big money for Pennsylvania, New Jersey and Delaware.

So how will the three states will use the money they’ll get from the $3 billion settlement?

New Jersey has plans for its $22.1 million, says Ronald Chillemi, the state’s acting insurance fraud prosecutor.

“That money will go to the state’s Medicaid program, absent some other exigency,” Chillemi said. “Medicaid was the victim because Medicaid paid for these prescriptions, which we now know were induced by various forms of fraud.”

The Keystone State knows where it’s sending its share of the GlaxoSmithKline deal, according to Ann Bale, a spokeswoman for Pennsylvania Department of Public Welfare

“We are expected to receive about $14 million as part of the settlement, and it will go into our medical assistance outpatient appropriation,” Bale said. “That is where the money went out to pay for the programs that ended up being in the lawsuit. In Pennsylvania, we call Medicaid ‘Medical Assistance.'”

Delaware will receive about $1 million, according to Christina Showalter, director of that state’s Department of Justice’s Fraud and Consumer Protection division.

She said $511,940 will go “directly back to Medicaid and medical services under Delaware’s division of Health and Social Services. The remainder will go back to the state of Delaware’s general fund.”

Showalter said the landmark settlement sends a strong message that unscrupulous drug manufacturers cannot exploit taxpayer-funded health-care programs.

Dozens of other states will share in the $3 billion settlement.

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