Medicaid fraud case brings in $10 million for the state

AUSTIN (KXAN) – A New York-based pharmaceutical manufacturer Hi-Tech Pharmacal Co., Inc. will have to pay more than $10 million to the state of Texas for reporting fraudulently inflated generic drug prices to the Medicaid program.

That amount will come from a total sum of $25 million Hi-Tech will pay to resolve the state’s civil Medicaid fraud allegations, the rest of the money going to the federal government. Medicaid is jointly funded by the state and the federal government. Additionally, the Texas Attorney General’s Officer will recover investigative and legal costs associated with the case.

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 the drugs, Medicaid reimburses pharmacies at vastly inflated rates. The state’s investigation revealed that Hi-Tech misreported the prices of various generic drugs to the Medicaid program. As a result, the taxpayer-funded program was overcharged for certain of the defendant’s products.

For more information about the Civil Medicaid Fraud Division’s efforts to eliminate waste, fraud and abuse in the Texas Medicaid program, access the Office of the Attorney General’s website here. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Users who violate these terms, including use of vulgar language or racial slurs, will be banned. If you see an inappropriate comment, please flag it for our moderators to review.

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