The state attorney general in Texas has reached a $28 million civil settlement with Abbott Laboratories over charges leveled more than four years ago regarding alleged false reporting of drug prices.According to a news release from Texas Attorney General Greg Abbott, the state will receive about $18 million in damages and $10 million in attorney fees and costs. Abbott Labs did not admit any wrongdoing in the deal.
"This settlement allows Abbott to avoid the further expense, burden and inconvenience of continuing to litigate this case," company spokesman Scott Stoffel said.
The case involved how drug makers report false drug prices that the Texas Medicaid program uses to estimate the cost Medicaid providers pay to get products from the companies.
"The taxpayer-funded program vastly overpays providers for their products" if companies report inflated prices, which was what happened in this case, according to the attorney general.
The attorney general's office has settled with other drug companies over this issue in the past, and has pending enforcement actions against several additional companies. An agreement with Hospira Inc. -- a big generic drug maker that spun off from Abbott in 2004 -- will govern that company's price-reporting practices in the future, according to the attorney general's release.
By: Jon Kamp
Wall Street Journal; September 11, 2008
