Office of the Attorney General News Release Archive



Thursday, October 4, 2001

ATTORNEY GENERAL REACHES SETTLEMENT IN PRESCRIPTION DRUG CASE

Texas receives portion of fine paid by pharmaceutical company

AUSTIN - Texas Attorney General John Cornyn today announced an agreement in principle with TAP Pharmaceutical Products, Inc., in a case of alleged Medicaid fraud. As part of the agreement with the 50 states and the District of Columbia, TAP will pay $57 million in restitution and penalties. The amount of that money attributed to the State of Texas Medicaid program totals $3.46 million. Once the federal contributions to the Texas Medicaid program are deducted, the State of Texas receives $1.35 million. TAP will also pay a $290 million fine and $528 million in damages and penalties to the federal government.

The TAP case is part of an ongoing state investigation conducted through the Office of the Attorney General and the Texas Health and Human Services Commission. The company allegedly provided doctors and urologists with free samples of Lupron, which were then knowingly billed to the Medicare and Medicaid programs at full cost. Lupron is used primarily to treat prostate cancer.

"A drug manufacturer that inflates the self-reported price of its products is basically stealing from taxpayers," said Attorney General Cornyn. "This is a business practice that I won't tolerate."

In September, the Bayer Corporation settled a lawsuit with Texas, 46 other states, and the U.S. Justice Department for allegedly inflating prices for its blood factor products between 1993 and 1999. The Texas Attorney General's Office currently has lawsuits pending against three other pharmaceutical companies. Dey, Inc., Roxane Laboratories, Inc., and Warrick Pharmaceuticals Corporation are accused of participating in an alleged scheme to corner the market in respiratory disease medications. The State seeks a total of $79 million in damages and penalties against the three companies.

"We are actively pursuing these and other cases where there is alleged wrongdoing," Cornyn added. "It's important that we restore integrity to government programs that have been manipulated and abused."

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