Ken Paxton

Monday, November 28, 2005

Attorney General Abbott Wins $10 Million In Medicaid Fraud Case

AUSTIN - Texas Attorney General Greg Abbott today won a big victory in a Medicaid fraud case against a major drug company. This is the last in a series of lawsuits against several drug companies, resulting in almost $56 million in recoveries for the state. The prolonged whistleblower litigation shined a light on drug-pricing schemes designed to enrich the companies while systematically defrauding the state Medicaid system.

In today’s settlement, Boehringer Ingelheim Corp. of Connecticut and its subsidiaries agreed to pay the state $10 million in damages to dismiss a lawsuit originally filed in September 2000 after whistleblower Ven-a-Care of the Florida Keys revealed the fraud to the state. The Attorney General’s suit claimed the companies falsified the wholesale prices of several dozen prescription drugs, particularly inhalants, causing the Texas Medicaid program to overpay the companies for these drugs.

We will not tolerate big pharmaceutical companies that ignore the laws of Texas and bilk Texas taxpayers in the race for profits, said Attorney General Abbott. We will make sure these companies pay for their wrongdoing and give back money that rightfully belongs to Texas.

The settlement with Boehringer and its subsidiaries Roxane Laboratories Inc., Boehringer Ingelheim Pharmaceuticals Inc. and Ben Venue Laboratories Inc. returns money to the state that the companies pocketed over time as they falsely reported their wholesale drug prices to the Medicaid program.

The close relationship enjoyed by all of these companies with the parent company made possible the climate of wrongdoing in which the companies marked up prices by as much as 500 percent to wholesalers, distributors, pharmacies, group purchasing organizations, home health care providers and others delivering prescriptions to Medicaid patients.

The litigation settled today represents the culmination of thousands of hours of effort from both the Attorney General and the Vendor Drug Program of the Texas Health and Human Services Commission.

Not only has the litigation resulted in the recovery of millions of dollars for the state, the discovery of the false pricing from Boehringer Ingelheim, Roxane and the other companies has resulted in significant changes in the way Texas reimburses pharmacists and physicians. These changes will save the state of Texas hundreds of millions of dollars in the future.

In addition, the Attorney General’s Office has shared information with many other states working to recover funds wrongfully paid, as well as to preempt future losses. Attorney General Abbott’s office has also assisted the U.S. Department of Justice and Congress in their efforts to eradicate this fraud. These efforts are expected to result in a wholesale change in the way drugs will be reimbursed by Medicaid across the country, which could result in savings of billions of dollars in the future.

Attorney General Abbott successfully concluded other lawsuits through settlements over the past two years that grew out of the original Ven-a-Care lawsuit. Dey Inc. settled for $18.5 million in 2003, and Schering-Plough Inc. and its subsidiaries settled last year for $27 million.

Attorney General Abbott’s Civil Medicaid Fraud team continues to investigate other drug companies for similar pricing schemes affecting the state’s health care program for the needy.