Massachusetts Attorney General Reaches Settlement With Drug Company To Resolve Price Reporting Litigation

August 15, 2007 -- BOSTON – Today, Massachusetts Attorney General Martha Coakley's Office reached a settlement agreement with Missouri-based ETHEX Corporation, a seller of generic pharmaceuticals, to resolve litigation pending in the U.S District Court in Boston. In that litigation, ETHEX was one of thirteen generic drug manufacturers sued by the Commonwealth for allegedly inflating the drug prices that they reported to national price reporting services.

The Commonwealth's Medicaid program, like all other state Medicaid programs and many private medical plans, use prices reported by national price reporting services to determine the amounts they will pay for drugs dispensed by pharmacies to their participants. The Commonwealth alleged that by reporting the inflated prices, ETHEX caused the Massachusetts Medicaid program to pay inflated amounts for Medicaid recipients.

In its settlement, ETHEX agreed to make three payments of $191,666 each, for a total of $574,998, to the Commonwealth over the next two years and to provide $150,000 in free drugs. In agreeing to the settlement, ETHEX denied any wrongdoing and asserted that its price reporting was consistent with all legal standards.

This matter was handled by Assistant Attorneys General Peter A. Mullin, Richard C. Heidlage, Robert P. Patten, Colleen A. McCarthy and Robert C. Molvar, all of Attorney General Martha Coakley’s Medicaid Fraud Unit.

Source: Massachusetts Attorney General

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