December 28, 2011 / 5:20 PM / 8 years ago

Actavis settles Medicaid fraud case for $84 million

(Reuters) - Actavis Group has reached an $84 million settlement with Texas to resolve civil claims that it defrauded the state’s Medicaid program by artificially inflating prices for its generic drugs.

The sum is just under half the $170.3 million that a Travis County state jury had ordered Actavis, a privately-held Icelandic company, to pay the state in February. Actavis had appealed that verdict, which followed a three-week trial.

In announcing the accord with U.S. units Actavis Elizabeth LLC and Actavis Mid-Atlantic LLC, Texas Attorney General Greg Abbott said Actavis’ inaccurate price reporting caused the Medicaid program to overpay pharmacies for prescription drugs.

The company did not admit liability in agreeing to settle, and both Actavis and Texas agreed to settle to avoid further litigation, according to the settlement agreement.

Doug Boothe, chief executive of Actavis Inc, the direct parent of Actavis Elizabeth and Actavis Mid-Atlantic, called the settlement a “favorable outcome” that allows Texas’ Medicaid patients to continue using its drugs.

“Actavis will continue to report our product pricing in an manner consistent with all applicable laws as well as the terms of this agreement,” Boothe said in a statement.

Abbott said the case arose from a whistleblower lawsuit filed more than a decade ago. He said his office has recovered nearly $450 million in drug pricing lawsuits.

Actavis has offices in Reykjavik and in Zug, Switzerland. It also has U.S. operations in Morristown, New Jersey.

The company was taken private for $3 billion in 2007 by Novator Partners, an investment vehicle of Actavis’ chairman, the Icelandic businessman Bjorgolfur Thor Bjorgolfsson.

The case is Texas ex rel. Ven-A-Care of the Florida Keys Inc v. Alpharma USPD et al, District Court of Travis County, Texas, No. D-1-GV-08-001566.

Reporting by Jonathan Stempel in New York; Editing by Tim Dobbyn

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