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Drug company to pay Florida $8.5 million to settle fraud claims

TALLAHASSEE — A pharmaceutical company accused of bilking the state of millions in a Medicaid fraud scheme will pay $8.5 million as part of a settlement agreement announced Wednesday.

The deal resolves a lawsuit filed against Boehringer Ingelheim Corp., the Connecticut-based parent company of Roxane Laboratories Inc., alleging that the drug manufacturer knowingly misled the state's Medicaid program to overpay for medicine for the previous 18 years.

Sandi Copes, a spokeswoman for Attorney General Bill McCollum's office, said both sides sought an agreement to avoid the cost and time of further litigation.

The company was accused of inflating the average wholesale price reported for state Medicaid programs. A pharmacy would pay the company a price lower for the drugs and profit with each Medicaid reimbursement, the lawsuit alleged.

The bigger the price difference the generic-drug maker could offer a pharmacy, the more likely it was to win business at taxpayers' expense, the state claimed.

Florida lost an estimated $4.4 million to Roxane's inflated pricing.

Two other defendants in the litigation — Dey Inc. and Warrick Pharmaceuticals — have yet to resolve their cases. In addition, the attorney general's Medicaid fraud unit is also pursuing legal action against six more drugmakers over fraudulent pricing. The state once estimated the total cost to taxpayers at $75 million.

As a part of the settlement signed earlier this week, Roxane Laboratories denied any wrongdoing or liability, according to court documents. A company representative could not be reached for comment.

A small Key West pharmacy, Ven-A-Care of the Florida Keys, alerted Florida officials to the alleged bogus drug pricing in a 1998 whistle-blower claim. The company has made a fortune on its numerous claims and will get $1.35 million in this case.

The state will receive $6.3 million with $4.4 million covering losses, $1.7 million going to the state's general fund coffers and $188,000 to pay for rewards for those who report fraud in Medicaid, the health care program for the poor.

John Frank can be reached at or (850) 224-7263.

Drug company to pay Florida $8.5 million to settle fraud claims 12/09/09 [Last modified: Wednesday, December 9, 2009 10:57pm]
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