 "Glenmark Generics settles pricing investigation in Texas; Agrees to pay $25 mn")
Glenmark Generics Inc, the US-based subsidiary of Glenmark Pharmaceuticals Ltd, has reached an agreement with Texas Attorney General to settle the pricing investigation case under the Texas Medicaid Fraud Prevention Act (TMFPA) by agreeing to pay $25 million over a period of four years. The company will make the payment in 16 equal instalments of $1.56 million each quarter for the next 16 quarters to the state of Texas.
In a statement filed with BSE, Glenmark Pharmaceuticals Ltd said that its subsidiary Glenmark Generics Inc, USA, has concluded the pricing investigation by the Texas Attorney General, USA. Under the terms of the agreed settlement, there is no admission of liability, it said.
“Under the settlement agreement, Glenmark must pay the State of Texas a total of $11.25 million for the State's general revenue fund. Because the Medicaid program is jointly funded by the State and US taxpayers, the federal government is entitled to a percentage of the settlement proceeds. The federal government's share is also $11.25 million. Additionally, the Texas Attorney General's Office will receive $2.5 million in attorneys' fees and costs,” said Glenmark in a BSE filing.
According to Robert Matsuk, President, North America and Global API Business, Glenmark, the settlement amount will not materially impact the organisation's cashflow. “We remain committed to continuing our mission of providing our customers with the finest generic pharmaceutical products in the US and complying with all applicable state and federal pricing requirements,” he added.
The investigation dates back to 2000 when the Texas Attorney General’s Civil Medicaid Fraud team investigated dozens of pharmaceutical manufacturers for reporting inflated drug prices to the Medicaid program. The state investigation, which was launched against Glenmark for possible violations of the TMFPA in August 2012, found that since 2005, Glenmark violated Texas law when it illegally misreported prices to Medicaid in order to induce pharmacies and other providers to purchase Glenmark’s products over its competitors’ products.
In a statement filed with BSE, Glenmark Pharmaceuticals Ltd said that its subsidiary Glenmark Generics Inc, USA, has concluded the pricing investigation by the Texas Attorney General, USA. Under the terms of the agreed settlement, there is no admission of liability, it said.
“Under the settlement agreement, Glenmark must pay the State of Texas a total of $11.25 million for the State's general revenue fund. Because the Medicaid program is jointly funded by the State and US taxpayers, the federal government is entitled to a percentage of the settlement proceeds. The federal government's share is also $11.25 million. Additionally, the Texas Attorney General's Office will receive $2.5 million in attorneys' fees and costs,” said Glenmark in a BSE filing.
According to Robert Matsuk, President, North America and Global API Business, Glenmark, the settlement amount will not materially impact the organisation's cashflow. “We remain committed to continuing our mission of providing our customers with the finest generic pharmaceutical products in the US and complying with all applicable state and federal pricing requirements,” he added.
The investigation dates back to 2000 when the Texas Attorney General’s Civil Medicaid Fraud team investigated dozens of pharmaceutical manufacturers for reporting inflated drug prices to the Medicaid program. The state investigation, which was launched against Glenmark for possible violations of the TMFPA in August 2012, found that since 2005, Glenmark violated Texas law when it illegally misreported prices to Medicaid in order to induce pharmacies and other providers to purchase Glenmark’s products over its competitors’ products.