AUSTIN, Texas (Legal Newsline) - Texas Attorney General Greg Abbott announced the resolution on Tuesday of a civil Medicaid fraud case that will return more than $10 million to the state of Texas.
Fougera Pharmaceuticals Inc. allegedly engaged in the fraudulent reporting of inflated drug prices to the Medicaid program. The New York-based subsidiary of Sandoz Inc. will pay $22.75 million to the state of Texas and the federal government as part of a settlement agreement.
Fougera allegedly misreported the prices of multiple drugs to the Medicaid program over a several year period. Consequently, Medicaid was allegedly overcharged for some of the companies' products.
Under state law, drug manufacturers must file reports with the Medicaid program disclosing the prices they share with distributors, wholesalers and pharmacies for their products. If manufacturers improperly report inflated market prices for their drugs, Medicaid may reimburse pharmacies at significantly inflated rates. The difference between the reimbursement amount and the real market price is referred to as the spread.
Fougera allegedly used illegally generated spreads to unlawfully induce pharmacies and other providers to buy Fougera's products.
Since 2002, Abbott's Civil Medicaid Fraud Division's recoveries for the state surpassed $470 million with the settlement. The total recoveries for the state and federal governments exceed $1.3 billion.