Actavis to pay Texas $170M for Medicaid scam

Jessica M. Karmasek Feb. 2, 2011, 3:26am


AUSTIN (Legal Newsline) -- A Travis County jury on Tuesday returned a record-setting $170 million verdict for damages, finding that Actavis Mid-Atlantic LLC misrepresented its drug prices to the taxpayer-funded Medicaid program.

According to Texas Attorney General Greg Abbott's office, the jurors determined that Actavis and co-defendant Actavis Elizabeth LLC should pay Texas and the federal government $170.3 million for defrauding the health program, which provides assistance to those eligible individuals and families with low incomes and resources.

Since 2000, the attorney general's Civil Medicaid Fraud team has investigated multiple pharmaceutical manufacturers for their products' prices to the Medicaid program. Texas' action against Actavis is one of those drug-pricing cases.

"Today's verdict makes clear that the Texas Attorney General Office will hold Medicaid providers accountable for defrauding the taxpayers. I am grateful to the trial team for their hard work on this complex case," Abbott said in a statement.

"The verdict shows we will effectively use the legal system to retrieve any funds that pharmaceutical manufacturers and other providers improperly take from the Medicaid program."

The state's legal action against Actavis stems from a whistleblower lawsuit that was filed under seal by a small Florida-based pharmacy called Ven-a-Care. The pharmacy owners pursued their claim after discovering Actavis reported artificially inflated prices to Medicaid for its drugs.

In order for pharmaceutical products to be eligible for reimbursement from Medicaid, Texas law requires that manufacturers accurately report market prices to the taxpayer-funded program. The Medicaid program uses this drug pricing information to determine the rates at which pharmacies are reimbursed for products.

The case against Actavis, Abbott's office said, is the first of its kind to go to trial. Another manufacturer, Par Pharmaceuticals Inc. of New Jersey, is scheduled to face a separate state court action in May.

Abbott said on Tuesday that his office will continue to "vigilantly pursue" providers that falsely report prices to Medicaid and defraud taxpayers.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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