Pharmaceutical giants Bayer and GlaxoSmithKline will pay the US government $344 million to settle claims they conspired to overcharge the Medicaid program for drugs.
The two companies had been accused of relabeling drugs sold to a private health insurer to conceal the fact the prices quoted to the insurer were considerably lower than those charged the federal medical programme for the poor.
US federal law requires drug companies to sell drugs to the government at the best price given to private clients.
In the settlement, Bayer agreed to plead guilty to one criminal charge for failing to report the production of the antibiotic Cipro under a private label for health insurer Kaiser Permanente and to pay a $5.6 million fine. The German firm also agreed to pay more than $250 million in civil penalties.
GlaxoSmithKline will pay $87.6 million in civil penalties, and both companies agreed to participate in a corporate integrity programme.
In a statement, Bayer said it believed its marketing practices "were responsible and conducted in good faith".
AFP