Pharmaceutical companies Bayer Corp. and Glaxosmithkline ("GSK") agreed to pay $344 million to settle a Medicaid False Claims Act ("FCA") whistleblower case. The suit alleged that Bayer and GSK engaged in a "lick and stick" scheme to avoid paying the drug rebates to the federal government. Under the Medicaid "best price" law, pharmaceutical companiesare required to pay rebates to the government if they sell drugs to other purchasers at cheaper prices than the government pays. The suit alleged that Bayer and GSK offered discounted prices on certain drugs (e.g., Bayer's antibiotic Cipro and high blood-pressure drug Adalat, and GSK's antidepressant Paxil and nasal spray Flonase) to Kaiser Permanente Medical Care Program, one of the nation_s largest health maintenance organizations, under a "private label" to avoid having to rebate the federal government. Bayer agreed to plead guilty and pay $5.6 million to settle criminal charges under the Food & Drug Administration's labeling laws and to pay $251 million in civil damages under the FCA for losses to the Medicaid program and Public Health Service entities ("PHS"). GSK, which did not face criminal charges, agreed to pay $87.6 million in civil damages. This the first nationwide fraud settlement to include payment to PHS entities, which include community health centers and disproportionate share hospitals. The whistleblower's estate will receive approximately $34 million.