Actavis to Pay $118.6M for Medicaid Fraud

January 12, 2012 

On January 4, 2012, Bloomberg News reported that units of Actavis Group Hf agreed to pay $118.6 million to resolve claims that they caused the U.S. and four state governments to overpay for drugs.

The settlement, filed Dec. 29 in federal court in Boston, followed an $84 million accord announced a day earlier in a lawsuit by the state of Texas, bringing the total to $202.6 million. In February, a state court jury in Austin ordered units of the Iceland-based company to pay $170 million for inflating billings to the Texas Medicaid program.

In the larger accord, Actavis settled with the U.S., New York, Florida, South Carolina and Iowa. The U.S., Florida and Texas cases were filed by Ven-A-Care of the Florida Keys Inc., a specialty pharmacy which prosecuted them civilly.

Ven-A-Care sued under the U.S. False Claims Act and similar statutes in Florida and Texas, which lets whistle-blowers sue on behalf of the government and share in any recovery. The states pursued their cases separately.

Ven-A-Care claimed that Actavis defrauded the U.S. and state governments by falsely reporting inflated prices of drugs. Actavis knew that the governments would use those false reports to set higher reimbursement rates for Medicaid, Ven-A-Care claimed. Actavis denied wrongdoing in the settlements.

The Justice Department didn’t join the case, although it recovered $108 million. Between the two cases, Ven-A-Care collected $15.6 million, court records show.

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