Abbott to pay $28 million to settle Medicaid suit
Abbott Laboratories will pay $28 million to Texas to settle a lawsuit claiming the drugmaker falsely reported drug prices to Medicaid programs, the state's attorney general said today.
The , based in Libertyville Township-based company will pay the state about $18 million in damages and $10 million in attorney's fees, Greg Abbott, the Texas attorney general, said in a statement. The state claimed Abbott sold Medicaid-covered drugs at discounted prices to large pharmacies without giving the same pricing data to Medicaid.
The lawsuit is one of multiple claims filed by Texas against drugmakers alleging improper drug-pricing schemes following a 2000 whistleblower lawsuit by a vendor, according to the state. The Texas attorney general already has won about $137 million in settlements from drugmakers over similar claims since 2003, Tom Kelley, the state's spokesman said today in an interview.
Abbott denies any wrongdoing, company spokesman Scott Stoffel said. "This settlement allows Abbott to avoid the further expense, burden and inconvenience of continuing to litigate this case," he said in a phone interview. The settlement isn't material, Stoffel said.
The Abbott suit was filed in 2004, the state said. Other settlements include $27 million from Schering-Plough/Warrick Pharmaceuticals in 2004 and $8.5 million from Baxter Healthcare Corp. in 2006, the state said.
Lawsuits against several other drug companies, including Alpharma Inc., Barr Pharmaceuticals Inc. and Watson Pharmaceuticals Inc. are pending, the state said.
Abbott shares fell 71 cents to $57.71 at 11:48 a.m. in New York Stock Exchange composite trading.
The lawsuit is Texas ex rel. Ven-A-Care of the Florida Keys v. Abbott Laboratories, D-1GV-04-01286, District Court, Travis County, Texas (Austin).
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