Drugmaker Nostrum and CEO Agree to Pay Up to $50 Million to Resolve Claims of Underpaying Rebates Owed Under Medicaid Drug Rebate Program

BOSTON – Nostrum Laboratories, Inc. (Nostrum), located in Missouri and New Jersey, and its founder and CEO Nirmal Mulye, Ph.D. (Mulye), have agreed to pay a minimum of $3,825,000 and up to $50 million if certain financial contingencies are met, to resolve allegations that they violated the False Claims Act by knowingly underpaying Medicaid rebates due for Nostrum’s drug Nitrofurantoin Oral Suspension (Nitro OS). The variable amount of the settlement is based on Nostrum’s and Mulye’s financial condition.

Updated January 23, 2024:

Although Nostrum and Mr. Mulye entered into a health care fraud settlement with the United States, they refused to agree to compliance-related oversight with HHS-OIG through a CIA. Therefore, as part of the Settlement Agreement, OIG reserved the right to exclude Nostrum and Mr. Mulye for the alleged conduct. Because they refused appropriate integrity obligations, OIG may use various tools to monitor their compliance with the Federal health care programs.

Read more on www.justice.gov

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