Texas Attorney General and Wichita Falls native Greg Abbott today, Tuesday, Oct. 15, announced the settlement of a medicaid fraud case against a powerful pharmaceutical company, according to the Office of the Texas Attorney General. Abbott is also in the middle of a fight for the governorship of Texas.
Under the settlement agreement, Fougera, a New York-based pharmaceutical company will pay the State of Texas and the federal government a total of $22.75 million. Based on the fact the Medicaid program is jointly funded by the State of Texas and U.S. taxpayers, the federal government will receive a percentage of the settlement proceeds.
Abbott, the top law enforcement officer in the Lone Star State, inititated the legal action after determining that Fougera had misreported the prices of various drugs to the Medicaid program. The false reporting occurred over a period of several years. Because of this activity by the pharmacy company, Medicaid was overcharged for several of the company's products.
Under Texas law, drug manufacturers must file reports with the Medicaid program which reveal the prices they charge pharmacies, wholesalers and distributors for their products. As a result of manufacturers improperly reporting inflated market prices for their drugs, Medicaid reimbuses pharmacies at vastly inflated rates. The difference between the reimbursement amount and the actual market price is referred to as the spread. Abbott's office accused Fougera of using its illegally created spreads to unlawfully induce pharmacies and other providers to purchase Fougeras products.
The Civil Medicaid Fraud Divisions recoveries for the State of Texas have surpassed the $470 million level while total recoveries for the state and federal governments now exceed $1.3 billion since 2002.
To obtain more information about the Office of the Attorney Generals efforts to fight Medicaid fraud, access the website at www.texasattorneygeneral.gov.
Abbott will be the first Wichita Falls native elected governor if he prevails in the Republican primary in the spring of 2014 against Tom Pauken. He would then face Democratic candidate Wendy Davis in November of 2014 in the general election. The polls have indicated Abbott is ahead.
In this time of rising medical costs in the United States, taxpayers are fortunate to have Abbott fighting fraudulent activities by drug companies which only exacerbate the problems patients face in trying to figure out a way to pay their medical bills.
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