Teva Pharmaceuticals has agreed to pay $78 million to settle Medicaid fraud allegations in Florida and Texas. Teva owes the state of Florida $27 million due to alleged violations of the Florida False Claims Act. Teva allegedly reported inflated drug prices to Florida’s Medicaid Program, which caused Florida to overpay Teva in reimbursement payments. The Medicaid program reimburses pharmacies for drugs based on the prices reported by drug manufacturers like Teva, and by illegally inflating the prices of its drugs, the company cost each State millions of dollars. Competitor company Ven-a-Care reportedly provided the State Attorney General with information about Teva’s illegal practices.
Teva will also pay the State of Texas $51.4 million for similar violations. Teva sold Medicaid-covered drugs at a discount to pharmacies such as Wal-Mart, CVS, and Walgreens, but chose not to report this pricing information to Texas’s Medicaid Program. Again, this caused Texas to overpay Teva for the drugs, in violation of state law. Industry whistleblower Ven-a-Care was also responsible for alerting the State of Texas to the alleged violations.