Texas AG says drugmakers ripped "tens of millions" off Medicaid

Rob Luke Jun. 21, 2007, 9:13am

Greg Abbott

AUSTIN -- Texas Attorney General Greg Abbott has apparently decided that it's Big Generic Pharma's turn for some legal heat.

Abbott announced Wednesday that he was suing three of the nation's largest generic-drug makers for defrauding the state Medicaid system of "tens of millions of dollars" in misleading billing.

The petition, filed in the Texas 201st District Court of Travis County, alleges the three sold drugs at "steep discounts" to large retailers. The defendants were then reimbursed by Medicaid at the full reported price.

"The false price reports led the Medicaid program to unnecessarily spend millions of taxpayer dollars on the defendants' products," Abbott's release stated.

Abbott's suit today charges generic-pharmaceutical makers Mylan Laboratories and Teva Pharmaceuticals of Pennsylvania, plus Sandoz of New Jersey, with breaching the Texas Medicaid Fraud Prevention Act.

Under it the state can seek restitution of overpayments plus interest, fines of up to $10,000 per breach of the Act, and legal costs.

Abbott claims that civil fraud actions brought by the AG's office have saved Medicaid $190 million during his tenure. The Texas Medicaid program cost over $17 billion to operate in 2005, his statement added.

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