National Drug Company Pays $7 Million To State's Medicaid Program To Settle Improper Drug Pricing Allegations, USA

Main Category: Litigation / Medical Malpractice
Also Included In: Pharma Industry / Biotech Industry
Article Date: 06 Jan 2009 - 0:00 PDT

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Attorney General Martha Coakley's Office has reached a settlement agreement with Teva Pharmaceutical USA, Inc. (Teva), a North Wales, PA, based pharmaceutical manufacturer to settle a False Claims Act case pending in United States District Court in Boston. Pursuant to the settlement, Teva has paid $7 million to the Massachusetts Medicaid Program.

"This is a national and industry-wide problem that the Commonwealth, other states and the federal government continue to address," Attorney General Coakley said. "Our office will continue to work with the state's Medicaid program, other law enforcement agencies and the federal government to implement a pharmaceutical reimbursement program that is fair to all parties and ensures continued coverage for our citizens."

Teva, and its wholly-owned subsidiary, Ivax Corporation (Ivax) are two of 13 drug manufacturers the Commonwealth sued in 2003 for allegedly falsely inflating the prices they reported to national pharmaceutical price reporting services. The Commonwealth's Medicaid program, MassHealth, like all other state Medicaid programs, and many private medical plans, uses prices reported by national price reporting services to determine what they will pay to pharmacies for ingredient costs in connection with prescription drugs. The Commonwealth alleges that by reporting the false and inflated prices the pharmaceutical companies caused the Medicaid program to pay inflated amounts for ingredient costs for prescriptions for Medicaid recipients. Medicaid is a joint federal-state program which provides healthcare services, including prescription drugs, to low income and disabled persons.

The settlement resolves the Commonwealth's claims related to the drugs that Teva and Ivax manufactured and sold during the years 1997 to 2003, including Acetaminophen with Codine, Amiodarone, Carbamazepine, Cephalexin, Clonazepam, Naproxen, Sulfamethoxazole/Trimethoprim, Albuterol, Baclofen and Clozapine. In agreeing to the settlement, Teva did not admit any wrongdoing and asserted that its price reporting was consistent with all legal standards. Teva is a subsidiary of Teva Pharmaceutical Industries, Ltd, an Israeli firm that is the world's largest generic drug manufacturer. At the time of the conduct alleged in the case, Ivax was an independent drug manufacturer headquartered in Miami, FL.

The Commonwealth has previously settled with five other defendants: Dey, Inc.; Barr Laboratories, Inc.; Duramed Pharmaceuticals, Inc; Ethex Corporation; and Roxane Laboratories, Inc. recovering a total of $7.475 million from those five companies. The case against the remaining six defendants is ongoing.

The case was handled and settled by Assistant Attorneys General Peter A. Mullin, Robert P. Patten, Colleen A. McCarthy, John Pina III, John A.Curseaden, and Gregory Matthews, with assistance from Investigators Anthony Megathlin, John Walsh and Steven Devlin, all of Attorney General Coakley's Medicaid Fraud Division.

Source
Harry Pierre
Deputy Press Secretary
Office of Massachusetts Attorney General Martha Coakley
http://www.mass.gov/ago