The State of Idaho has agreed to settle claims against two groups of the Actavis pharmaceutical company related to allegations that Actavis knowingly inflated reported wholesale prices of certain drugs in order to receive extra compensation from the State’s Medicaid program. For $1.2 million, the two Actavis companies will be released from a lawsuit that was filed in 2007 by the State’s Attorney General against them and other pharmaceutical companies, including Astrazeneca, Merck, Johnson & Johnson and others. The drug companies’ scheme, according to the allegations of the suit, was to provide false information to the State regarding the cost of the drugs in order to increase the revenue from sale of the drugs through the program. The complaint also alleged that the drug companies used the extra margin created by the fraud to further market their drugs to consumers. Actavis does not admit liability and avoids being excluded from the State’s Medicaid program in the future as a result of the agreement, which must be approved by the Idaho State court.
See the Idaho Attorney General’s news release here: http://www2.state.id.us/ag/newsrel/2010/nr_may272010.htm
