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US: Drugmaker to Pay $8.5 Million to Settle Texas Medicaid Lawsuit

Bloomberg News
June 13th, 2006

Baxter International Inc., the world's biggest maker of blood-disease treatments, has agreed to pay $8.5 million to settle a suit alleging it falsely reported the prices of drugs to the Texas Medicaid system.

The Texas attorney general sued Deerfield-based Baxter, North Chicago-based Abbott Laboratories and B. Braun Medical Inc. in 2004, claiming the companies misreported prices of intravenous fluids and injectable medications, leading Texas Medicaid to reimburse pharmacies at above-market rates.

"We are pleased the company chose to cooperate instead of fighting the state, but regardless, those who ignore the law in the pursuit of illegal profits must pay for the error of their ways," Atty. Gen. Greg Abbott said Monday. The suits against Abbott Labs and B. Braun are still pending.

The settlement brings to $64 million the amount Texas has collected from Medicaid billing disputes since bringing its first case in 2000, including a $27 million settlement with Schering-Plough Corp. in May 2004.

The state credits a 1997 Medicaid fraud law that provides whistleblowers with a percentage of damages for helping bring alleged pricing abuses to light.

"For a period of time we did not provide information in as timely a manner or in the format required by Texas regulation," said Baxter spokeswoman Deborah Spak. "We have cooperated fully with their investigation, and we have taken appropriate steps to make sure their unique reporting requirements have been met."





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