Sanofi-Pasteur has agreed to pay $19,868,194 to resolve claims that it incorrectly calculated drug prices and thereby overcharged the U.S. Department of Veterans Affairs (VA) for drugs under two contracts between 2002 and 2011, the Department of Justice announced today. Sanofi Pasteur, a Delaware corporation headquartered in Swiftwater, Pennyslvania, is the vaccines division of Sanofi-Aventis.

“It is important that pharmaceutical companies provide complete, accurate, and current information to the VA about the pricing of their drugs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will ensure that pharmaceutical companies follow the rules for drug pricing when selling to the government.”

Under the Veterans Health Care Act, 38 U.S.C. 8126, drug manufactures may not charge the VA more than a maximum amount, known as the Federal Ceiling Price (FCP), for covered drugs. Sanofi Pasteur disclosed to the VA that it had incorrectly calculated the FCP for certain drugs from 2007 to 2011 and overcharged the VA. The Office of Inspector General for the VA investigated the matter, and it determined that the error resulted in overcharges going back to 2002.

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

Under the settlement, in addition to paying approximately $19.8 million, Sanofi Pasteur has agreed that it will not pursue claims for reimbursement for sales where it contends its error in calculating the FCP resulted in a lower price to the VA.

This settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the Office of Inspector General of the Department of Veterans Affairs. No lawsuit was filed in this matter and there has been no determination of liability.