Actavis to Pay Texas $84 Million to Settle Medicaid Drug-Pricing Lawsuit

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.

Company Statement

“Actavis is pleased to have resolved this matter and looks forward to providing continued access to our products to the more than 3 million Texans who rely on Medicaid for their medical coverage,” Doug Boothe, chief executive officer of Activis Inc., the company’s U.S. unit based in Morristown, New Jersey, said today in an e-mail.

“We elected to settle this case rather than pursue an appeal of the jury’s decision in order to secure this favorable outcome,” Boothe said. “Actavis will continue to report our product pricing in a manner consistent with all applicable laws as well as the terms of this agreement.”

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

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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