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Texas Reaches Settlement Agreement With West-Ward Pharmaceuticals

David McNew, Getty Images

The State of Texas has reached an agreement with a New Jersey-based pharmaceutical company after a lengthy Medicaid fraud investigation.

The announcement comes from Texas Attorney General Greg Abbott,who announced the $10 million settlement, which will go to Texas and the federal government.

The agreement was made with West-Ward Pharmaceuticals Corp., who fraudulently reported inflated drug prices to the Medicaid program for nearly 10 years.

Under state law, drug manufacturers must file reports with the Medicaid program that disclose the prices they charge pharmacies, wholesalers, and distributors for their products.

When manufacturers improperly report inflated market prices for their drugs, Medicaid reimburses pharmacies at vastly inflated rates.

Under the settlement, West-Ward must pay the State of Texas a total of $4.5 million for the State’s general revenue fund. Since the Medicaid program is jointly funded by the State and U.S. taxpayers, the federal government is entitled to a percentage of the settlement proceeds.

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