$10 Million Settlement Reached with West-Ward Pharmaceuticals to Resolve Medicaid Allegations By Tod Aronovitz | 07/03/14 | 0 Comment

After a lengthy civil Medicare fraud investigation by the state of Texas, a New Jersey-based pharmaceutical company agreed to pay a major settlement to end allegations that it misreported prices on some of its prescription drugs for almost a decade.

The company, Eatontown, N.J.-based West-Ward Pharmaceuticals, allegedly inflated prices in order to receive higher reimbursements from the Texas Medicaid program. This improper pricing also caused Medicaid to pay pharmacies more than it should have for some of the company’s products, according to an announcement by the Office of the Texas Attorney General.

Under terms of the settlement, West-Ward will pay $4.5 million to the State of Texas and $5.5 million to the federal government since Texas’ Medicaid program is partially funded by U.S. taxpayers.

Texas Attorney General Greg Abbott said that its Civil Medicaid Fraud Team started investigating in 2000, and looked into the pricing practices at a number of pharmaceutical manufacturers, including West-Ward. After its investigation, the state accused West-Ward of overstating prices since 1995.

Under Texas state law, drug manufacturers must disclose to the Medicaid program the prices they charge to pharmacies, wholesalers and distributors for their products. When manufacturers improperly report inflated market prices for their drugs, Medicaid reimburses pharmacies at greatly higher rates.

This difference between the reimbursement amount and the actual market price is known as the “spread.” West-Ward supposedly created these illegal spreads to unlawfully persuade pharmacies and other providers to purchase West-Ward’s products.

Although West-Ward has decided to settle, it has denied all allegations brought against it by the state of Texas, according to the settlement agreement.

How to Report Miami Medicare Fraud

Healthcare professionals or medical billing employees who have knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect up to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.