AUSTIN, Texas (Legal Newsline) - Texas Attorney General Greg Abbott announced on Thursday that the Texas Medicaid program will receive $23 million of a $65 million state/federal settlement with a drug manufacturer that allegedly reported inaccurate drug prices.
Mylan Laboratories -- with national subsidiaries Mylan Pharmaceuticals and UDL Laboratories -- allegedly inaccurately reported the price of its drugs to the Texas Medicaid program. This caused the Texas Medicaid program to significantly overpay pharmacies for certain generic drugs.
Under Texas law, all manufacturers are required to accurately report market prices to the taxpayer-funded program since it bases its reimbursement to pharmacies on the pricing information reported.
The suit alleged that the defendants sold hundreds of Medicaid-covered drugs at steeply discounted prices to large pharmacies such as Wal-Mart, CVS, Walgreens, but the Texas Medicaid program knew nothing about these prices.
When pharmacies sought Medicaid reimbursement for these drugs, the false price reports led the Texas Medicaid program to buy these products at millions of taxpayer dollars above what was necessary, Abbott claims.
The settlement stems from a lawsuit Abbott filed against Mylan and two other drug manufacturers in 2007.
Teva Pharmaceutical Industries settled earlier this year for $169 million to resolve claims brought by Texas, several other states and the federal government.
The case against Sandoz Inc. of New Jersey -- with subsidiaries Geneva Pharmaceuticals Inc., Novartis Pharmaceuticals Inc., Eon Labs and Apothecon Inc. -- is still ongoing.