Texas, Actavis reach $84M settlement

Bryan Cohen Dec. 28, 2011, 1:00pm


AUSTIN, Texas (Legal Newsline) - Texas Attorney General Greg Abbott announced an $84 million settlement on Wednesday with a pharmaceutical manufacturer resolving allegations of Medicaid fraud.

Actavis Mid-Atlantic LLC and Actavis Elizabeth LLC allegedly defrauded taxpayers by improperly reporting drug prices to the Texas Medicaid program. Under the terms of the settlement, Abbott's office recovered $29.23 million for the state's general revenue fund.

After a three-week trial in February, a Travis County jury unanimously confirmed the state's civil Medicaid enforcement action against Actavis, finding that the company falsely reported the price of its drugs to the Medicaid program. Due to the defendant's allegedly inaccurate price reporting, the program overpaid pharmacies for prescription products from Actavis.

The company appealed the verdict and the court judgment that followed. The State worked to resolve the enforcement action by negotiating the settlement, to avoid lengthy appeals and the delay of timely reimbursement to the state treasury.

Since 2000, Abbott's civil Medicaid fraud team has brought several cases against pharmaceutical manufacturers for allegedly reporting inflated drug prices to the Medicaid program. The state's legal action against Actavis was one of those cases and was the only state whistleblower case to reach jury trial. Abbott's office has recovered a total of almost $450 million on behalf of the taxpayer-funded Medicaid program in pursuit of drug-pricing schemes.

The state's case against Actavis resulted from a whistleblower lawsuit filed under seal more than a decade ago by a small Florida-based pharmacy called Ven-A-Care. The owners of the pharmacy pursued their claim after the discovery that Actavis and other companies allegedly reported artificially inflated prices to Medicaid for its drugs.

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