Generic Drug Maker Settles “Price Inflation” False Claims Case With Massachusetts For $7 Million

The Massachusetts Office of the Attorney General announced Monday that it had entered into a settlement with drug manufacturer Teva Pharmaceutical USA, Inc. to settle a False Claims Act case pending against it in a federal court in Boston. Teva agreed to pay $7 million to the Massachusetts Medicaid Program.

The Commonwealth alleged that Teva and its subsidiary, Ivax Corporation, falsely inflated drug prices reported to national price reporting services from 1997 to 2003. The inflated prices caused Massachusetts to overpay pharmacies for the cost of ingredients for prescription drugs for Medicaid recipients. Teva Pharmaceutical USA is a subsidiary of the world’s largest generic pharmaceutical maker, the Israeli firm Teva Pharmaceutical Industries, Ltd. Among the generic drugs manufactured by Teva are Acetaminophen with Codine, Amiodarone, Carbamazepine, Cephalexin, Clonazepam, Naproxen, Sulfamethoxazole/Trimethoprim, Albuterol, Baclofen and Clozapine.

Massachusetts filed the lawsuit in 2003 against Teva, Ivax, and 11 other drug manufacturers. The Commonwealth has entered into settlement agreements with five other companies (Dey, Inc.; Barr Laboratories, Inc.; Duramed Pharmaceuticals, Inc; Ethex Corporation; and Roxane Laboratories, Inc.) for a combined total of $7.475 million. The claims against the other six drug manufacturers remain unresolved.

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