Abbott Labs settles Texas fraud case for $28 million

Chris Rizo Sep. 9, 2008, 11:56am

Greg Abbott (R)

AUSTIN, Texas (Legal Newsline)-The Texas attorney general has reached at $28 million settlement with Abbott Laboratories Inc., the agency announced Tuesday.

The settlement with the Chicago-based pharmaceutical giant resolves Texas Attorney General Greg Abbott's claims that the company reported bogus drug prices to the state and federal Medicaid programs.

The agreement provides $18 million in damages and $10 million in attorneys' fees and costs, the attorney general's office said. The case came from a whistleblower lawsuit by a state vendor, Ven-A-Care.

The lawsuit is Texas ex rel. Ven-A-Care of the Florida Keys v. Abbott Laboratories, D-1GV-04-01286, District Court, Travis County.

Drug companies are required to disclose their pricing schemes to a variety of customers, including pharmacies, wholesalers and distributors. The information is used by the state to determine what Medicaid pharmacies pay for the medications.

Those costs, plus prescription dispensing fees, are then paid to Medicaid pharmacies.

The attorney general said because the drug manufacturer falsely reported prices, Medicaid reimbursed pharmacies at inflated rates.

Since 2003, the Texas attorney general's office has settled drug pricing cases against companies, including Schering-Plough/Warrick Pharmaceuticals, Dey Inc., Boehringer Ingelheim/Roxane Laboratories and Baxter Healthcare Corp.

Meanwhile, enforcement actions against Alpharma Inc., Barr Pharmaceuticals Inc. and Watson Pharmaceuticals Inc., are still pending.

From Legal Newsline: Reach reporter Chris Rizo at

More News