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Pharma, continued from page 20 Dey’s feckless actions led the state to request court sanctions against the company and against Mozak. In January 2003, Travis County district judge Suzanne Covington granted the state’s motion, and Dey ended up paying about $200,000 to the state. The sanctions were among the biggest such sanctions ever levied in Travis County. But there were more costs for Dey. Five months after Covington granted the sanctions, Dey settled the lawsuit with the state of Texas for $18.5 million. In a statement issued at the time of the settlement, Dey said that the Medicaid reimbursement system is “seriously flawed. The Company is settling this litigation, as a pragmatic solution, to avoid the costs of continuing litigation and the vagaries inherent in it.” It added that the settlement did not “constitute an admission of fault or liability by Dey.” The whistleblower in the case, Ven-A-Care, got $4.3 million. \(Mozak has reportedly since left Dey. The Dey media office did not respond to requests for comment on Mozak or the sanctions levied against W bile the Dey case was a big win for the state, it faces tough battles with other drug makers. In particular, litigation against Roxane Laboratories, the Connecticut-based subsidiary of German drug giant Boehringer Ingelheim GmbH \(2003 revenues: $9.5 tentious. The state claims that Roxane knowingly inflated its prices on about 18 different drugs, including the asthma drug ipratropium bromide, and contin ued doing so even after the state began investigating the company. In a January court filing, the state says that Roxane quadrupled its prices on a generic drug that was under investigation. The filing quotes an e-mail from the company’s national sales director, who acknowledged that there was “political pressure” from regulators over the company’s price reporting methods. The sales director went on saying that the government was probably going to punish the industry, “so why not make some money meanwhile….” In the court filing, the state says that Roxane “knowingly refused to report its most up-to-date and accurate… prices because such reports would have resulted in lower reimbursement for Roxane’s products.” The state also claims that Roxane was schooled in the questionable ethics of Medicaid reimbursement by a former Dey employee. The January 20th filing says that a former Dey employee, Mark Pope, was retained by Roxane and that he “taught Roxane’s management that customers in the home health care mar BIG PHARMAWS HISTORY OF FRAUD BY ROBERT BRYCE 2004: HealthSouth, the embattled rehabilitation services provider, agreed to pay $325 million to the settle federal charges that it had overbilled Medicare. The whistleblower in that case, James DeVage of San Antonio, was awarded $8.1 million. 2004: TAP Pharmaceutical Products Inc. agreed to pay $150 million to settle a number of lawsuits about the marketing and pricing of its drug, Lupron, a prostate cancer drug. That settlement followed a 2001 lawsuit over Lupron that TAP settled for $875 million. 2004: Schering-Plough Corp., and its subsidiary, Warrick, settled a whistleblower suit by agreeing to pay the state of Texas $27 million. 2004: Drug giant Pfizer agreed to pay $430 million to settle charges that it had defrauded Medicaid in the use of its drug, Neurontin. The company also agreed to sign a “corporate integrity” agreement that allows outside monitoring of its marketing practices. 2003: Dey, Inc. paid $18.5 million to settle a lawsuit brought by the Texas Attorney General and Ven-A-Care of the Florida Keys, that it had inflated the cost of its inhalant drugs. The state of Texas got more than $9 million of the settlement. The remainder was split by the federal government and Ven-A-Care, the whistle blower in the case. 2003: Bayer Corp. and GlaxoSmithKline paid $344 million to settle charges that it had inflated the cost of several drugs. The companies alleged used a scheme known as “lick and stick,” in which they sold re-labeled drugs at deep discounts to certain customers and then concealed that information in order to get higher payments from Medicaid. The settlement was shared by 49 states and the District of Columbia. 2002: HCA \(formerly known as Columbia/HCA Healthblower claims that it had submitted false cost reports, false requests for management fees and paid kickbacks for referrals from doctors. The settlement followed a 2001 agreement by HCA to pay $840 million to resolve similar whistleblower claims. The lead attorney on the case was John R. Phillips, who played a key role in the 1986 revisions of the federal False Claims Act. 2001: Driscoll Children’s Hospital and Foundation of Corpus Christi settled a whistleblower case brought by the state of Texas for $14.5 million. The federal government got the bulk of the proceeds. The state of Texas got $5.3 million. The whistleblower, the hospital’s former chief financial officer, William Goodwin, was awarded $2.9 million. 24 THE TEXAS OBSERVER MARCH 4, 2005