Teva Pharmaceutical settles Medicaid fraud suit

Teva Pharmaceutical Industries Ltd. has paid a sizable sum to end False Claims Act litigation initiated by the state of Massachusetts in federal court in Boston. The lawsuit accused Teva, a generic drug maker, and Ivax Pharmaceuticals Inc., Teva’s wholly owned subsidiary, of enticing doctors and pharmacies to purchase the companies’ drugs at a cost below that reported to national price reporting services, thereby enabling the health care providers to pocket the difference between the amount spent on the drugs and the amount received in reimbursement from Medicaid. State Medicaid programs, like Massachusetts’ MassHealth, use prices reported by nationwide price reporting services to assess the amount the government program will pay to doctors and pharmacies in connection with drugs prescribed for Medicaid patients. By submitting falsely inflated prices, the drug companies caused MassHealth to overpay for prescription drugs to Medicaid recipients.

Teva and Ivax are just two of thirteen drug makers sued by Massachusetts under the False Claims Act for falsely inflating the prices the companies submitted to national pharmaceutical price-reporting services. Massachusetts had already settled with five of the defendant companies and the case remains pending against the other six pharmaceutical companies. Teva admitted no wrongdoing in connection with the settlement.

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