Generic drug manufacturer Actavis made a big mistake when it decided to take the Texas Average Wholesale Price (AWP) fraud case to a jury trial.  The result was a record-setting verdict for damages in the amount of $170 million against the drug manufacturer.  The jury found that Actavis fraudulently misrepresented the price of its drugs to the State’s Medicaid program, which is funded by taxpayers.  The jurors ordered Actavis, along with its co-Defendant Actavis Elizabeth, LLC, to pay the State of Texas and the federal government $170.3 million for defrauding the Medicaid program.

The Medicaid fraud suits, commonly referred to as the AWP Litigations, against drug manufacturers state that the companies are misreporting their drug prices in a deliberate effort to increase the payments received from State Medicaid systems. Under federal and state law, Medicaid payments to drug providers are derived using a series of pricing levels that the companies disclose to reporting services, which in turn provide the pricing information to state governments.  As part of the joint state-federal Medicaid program, the states pay pharmaceutical providers millions of dollars a year.  The AWP lawsuits allege that some average wholesale prices are as much as 6,000 percent higher than the drugs’ true cost.

Texas Attorney General Greg Abbott stated that the $170 million AWP verdict “shows we will effectively use the legal system to retrieve any funds that pharmaceutical manufacturers and other providers improperly take from the Medicaid program.”  The Attorney General added that “the jury determined that the Defendants owe $170 million because of improper drug price reporting. 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.”

Several states have brought AWP fraud suits against drug manufacturers for the fraudulent reporting of their drug prices to the state Medicaid agencies.  Along with the states’ respective Attorneys General, our firm currently represents the citizens of Alaska, Alabama, Hawaii, Kansas, Louisiana, Mississippi, South Carolina, and Utah in efforts to recover the billions of dollars in overpayments as a result of the drug manufactures’ fraudulent price reporting scheme.  The State of Alabama has cases set for trial in state court this fall against drug manufacturers Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc.

Source:  Press Release from Texas Attorney General’s Office

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