Wichita Falls native and Texas Attorney General Greg Abbott announced today that his office has settled a $5 million Medicaid fraud case with a pharmaceutical company, according to the Office of the Texas Attorney General. Abbott, who is currently running for governor of Texas, said the State of Texas and the federal government will equally share in a $5 million settlement with Major Pharmaceuticals Inc. to resolve civil Medicaid fraud claims. Co-defendant The Harvard Drug Group LLC is also named in today's settlement.
Abbott will become the first Wichita Falls native to become elected governor if he wins that race in 2014. He is running as the favorite in the Republican primary while no Democrat has yet announced. State Senator Wendy Davis has been rumored to be considering a run though she said she won't announce before Labor Day. Well, Labor Day has come and gone so we could hear an announcement any day as to her intentions.
The states enforcement action under Abbott's direction accused Major of misreporting the price of various generic drugs to the Medicaid program. As a result, the taxpayer-funded program was overcharged for some products sold by Majors.
Drug manufacturers such as Major must file reports with the Medicaid program that disclose the prices they charge pharmacies, wholesaleers and distributors for their products. The difference between the reimbursement amount and the actual market price is referred to as the spread. The Office of the Attorney Generals enforcement suit charged Major with using their illegally created spreads to unlawfully induce pharmacies and other providers to purchase the companys products.
Major's improper price reporting first came to light when Ven-A-Care of the Florida Keys Inc., a pharmacy , filed a whistleblower lawsuit under the Texas Medicaid Fraud Prevention Act. The State of Texas intervened in that case to recover fraudulent overpayments made by the Medicaid program to pharmacies based on the prices reported by Major. Under the law, Ven-A-Care is entitled to a share of the overall recovery.
The defendants inappropriate price reporting was first identified by Ven-A-Car of the Florida Keys Inc., a pharmacy that subsequently filed a whistleblower lawsuit pursuit to the Texas Medicaid Fraud Prevention Act.
James V. Allred was the first resident of Wichita Falls to be elected governor in the 1930s. However, he was not a native since he was born down the road 45 miles in Bowie, Texas.
As Attorney General Abbott has left his signature on the office with high profile prosecutions of the Fundamentalist Latter Day Saints leaders including Warren Jeffs for sexual assault of children in the Yearning For Zion Ranch Compound near Eldorado, Texas. He also defended the religious right of the Lone Star State to maintain monuments bearing the Ten Commdments on them in Austin.
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