THE ATTORNEY GENERAL OF TEXAS
Ken Paxton

Wednesday, December 28, 2011

Texas Attorney General Resolves Medicaid Fraud Enforcement Action against Actavis

AUSTIN Texas Attorney General Greg Abbott secured an $84 million agreement with pharmaceutical manufacturer Actavis Mid-Atlantic, LLC and Actavis Elizabeth, LLC. The agreement resolves the State’s civil Medicaid fraud enforcement action against Actavis, which was charged with defrauding the taxpayers and improperly reporting drug prices to the Texas Medicaid program. Under the settlement agreement, the Attorney General’s Office recovered $29.23 million for the State’s general revenue fund.

After a three-week trial last February, a unanimous Travis County jury confirmed the State’s allegations and found that Actavis falsely reported the price of its drugs to the Medicaid program. Because of the defendant’s inaccurate price reporting, the Medicaid program overpaid pharmacies for Actavis’ prescription products. Actavis appealed the verdict and the resulting court judgment. In order to avoid lengthy appeals that would ultimately delay timely reimbursement to the state treasury, the State worked to resolve its enforcement action by negotiating the settlement agreement.

Since 2000, the Texas Attorney General’s Civil Medicaid Fraud team has investigated multiple pharmaceutical manufacturers for reporting inflated drug prices to the Medicaid program. The State’s legal action against Actavis was one of those drug-pricing cases and was the only State whistleblower case to reach jury trial. With today’s settlement, the Office of the Attorney General has recovered almost $450 million on behalf of the taxpayer-funded Medicaid program in pursuit of drug-pricing schemes.

The State’s case against Actavis stemmed from a State whistleblower lawsuit filed under seal more than a decade ago by a small Florida-based pharmacy known as Ven-A-Care. The pharmacy owners pursued their claim after discovering that Actavis, among others, reported artificially inflated prices to Medicaid for its drugs.