[Article submitted by Dr. Caroline Poplin]
Actavis Group, a privately held generic pharmaceutical company based in Iceland, has settled a Medicaid fraud case for $84 million with the state of Texas. According to Texas Attorney General Greg Abbott, Actavis had been artificially inflating prices of its generic drugs and medications. These were drugs and medications that Medicaid patients frequently used. As a result, Medicaid had been overpaying pharmacies for prescription drugs.
After a three-week trial in February, a Texas Travis County state jury initially ordered Actavis to pay the state $170.3 million. Actavis appealed the ruling and both sides agreed to settle for $84 million to avoid further litigation. Actavis did not admit liability, and believes that Texas Medicaid patients will continue to use its products.
While the settlement agreement provides the state of Texas with the means to recuperate some of the lost money for Medicaid services, the fact remains that Actavis Inc. and its U.S. units Actavis Elizabeth LLC and Actavis Mid-Atlantic LLC were accused of engaging in practices that financially stressed Medicaid and its patients.
Medicaid serves low-income and disabled citizens and permanent residents. Actavis was taken private for $3 billion in 2007. This lawsuit and settlement demonstrate the necessity of vigilance with regard to healthcare funding and fraud. In the past decade, the Texas Attorney General’s office alone has recovered almost $450 million in drug pricing lawsuits. Law firms that specialize in false claims and drug marketing are further resources to combat healthcare and drug pricing fraud.