False Price Reports Result in Medicaid Fraud Settlement

Pfizer Inc. and Endo Pharmaceuticals agreed to resolve Medicaid fraud allegations by paying the State of Texas a total of $36.34 million.

Both pharmaceutical companies were accused of filing false price reports with Medicaid.  The false price reports allegedly misstated the prices charged for their pharmaceutical products.

Under state and federal law, drug companies must file price reports setting forth the prices they charge pharmacies, wholesalers and distributors for their products. The price reports are used to establish Medicaid reimbursement rates.

The difference between the Medicaid reimbursement amount and the actual market price is referred to as the “spread.”  The government alleged that Pfizer and Endo filed the false price reports in order to increase the spread and thereby induce pharmacies and other providers to purchase their products.

The improper price reports were first identified by Ven-A-Care of the Florida Keys Inc., a pharmacy that filed a qui tam or whistleblower lawsuit on behalf of the government. 

Individual citizens who have knowledge of false claims can file these types of lawsuits on behalf of the government and share in any recovery.  Under state and federal False Claims Acts, the whistleblower’s share or reward is usually between 15% and 30% of the amount recovered by the government.

The qui tam lawsuit was initially filed “under seal” (in secret) so the government could conduct an investigation before the defendants knew that they were under investigation.  No one other than the government and the court knew about the lawsuit until the government completed its investigation.

In this case, the State of Texas conducted an investigation and decided to intervene in the case to recover overpayments made by Medicaid to pharmacies based on the false price reports.  The pharmacy that brought the suit will therefore receive a share of the overall recovery as its whistleblower reward.  Pfizer and Endo will also pay the whistleblower’s attorney’s fees.

If you are aware that false price reports are being submitted to the government – or that other types of false claims are being submitted to Medicare or Medicaid – then you should consult with an experienced Medicare and Medicaid fraud attorney immediately.  You may be entitled to legal protections and a substantial reward as a whistleblower.

To arrange a free and confidential consultation, call John Howley, Esq. directly at (917) 652-6504 or click here to reach our office via email.  No attorney’s fees will be charged unless you win, in which case the attorney’s fees will be paid out of the total amount recovered.

John Howley, Esq.

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