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Whistleblower Stands to Receive Millions of Dollars for Exposing Medicaid Fraud

In a lawsuit filed by a whistleblower, a Texas jury demanded that generic pharmaceutical company Actavis Mid-Atlantic, LLC pay the state over $170 million for overcharging the Texas Medicaid program.  Under the False Claims Act, the whistleblower, a Florida company called Ven-A-Care, is in line to receive a portion of the settlement, which will be in the millions of dollars.

The lawsuit accused Actavis of inflating the average wholesale price of its drugs to the Texas Medicaid system. The drug maker allegedly used the inflated prices to market its products to pharmacies, which paid a lower price and then pocketed the difference from Medicaid reimbursements. The Travis County jury found that Actavis violated the Texas Medicaid Fraud Prevention Act from 1995 to 2005 in its price reporting.

“The jury determined that the defendants owe $170 million because of improper drug price reporting,” Texas Attorney General Greg Abbott said in a press release. “Considering the hundreds of millions of dollars that are at stake, we will continue to vigilantly pursue providers that falsely report prices to Medicaid and defraud the taxpayers.”

According to a article the whistleblower’s share in the Texas settlement could be as much as $35 million.

Class Action Central previously wrote about Ven-A-Care’s whistleblower actions. In December 2010, Abbott Laboratories Inc., Roxane Laboratories Inc., and B. Braun Medical Inc. settled a whistleblower lawsuit alleging that they defrauded government health-care programs out of millions by inflating the prices of their drugs.  The three drug makers agreed to settle the suit for $421 million, of which $88.4 million was awarded to Ven-a-Care for initiating the action.

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