Bloomberg News

Actavis to Pay $84 Million to End Medicaid Drug-Pricing Suit

January 03, 2012

(Updates with jury verdict in second paragraph.)

Dec. 28 (Bloomberg) -- Two units of Actavis Group Hf will pay $84 million to settle a lawsuit over drug pricing, Texas officials said, less than half the amount an Austin jury said the company should pay.

The state accused Actavis Mid-Atlantic LLC and Actavis Elizabeth LLC, subsidiaries of the Iceland-based company’s U.S. division, of inflating billings to the Texas Medicaid program by falsely reporting drug prices. The state court jury in February ordered the units to pay the state $170 million.

The settlement resolves that litigation, Texas Attorney General Greg Abbott said today in a statement. The settlement includes a $29.2 million recovery for the state’s general fund, Abbott said.

“Actavis denies any and all wrongdoing, and denies that it has any liability relating to the Texas judgment,” the company and the state said in the settlement agreement. The parties reached a settlement “to avoid the delay, uncertainty, inconvenience and expense of continuing the litigation.”

The lawsuit is one of multiple claims by Texas and other states alleging that pharmaceutical companies inflated Medicaid billings for drugs through inaccurate price reporting.

The Actavis suit was the only Texas claim to reach trial, Abbott said. His office has recovered almost $450 million from pharmaceutical companies in drug-pricing suits.

Gerard Farrell, a spokesman for Actavis, declined to immediately comment.

The case is State of Texas ex. Rel. Ven-A-Care of the Florida Keys Inc., D-1-GV-08-1566, District Court of Travis County, Texas (Austin).

--Editor: David E. Rovella

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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