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Texas Attorney General John Cornyn has sued three drug companies that manufacture asthma medications for alleged Medicaid fraud. Cornyn is seeking $79 million from the companies, which he alleges engaged in a pricing scheme that defrauded the taxpayer-funded program for the poor to increase their market share. He alleges that Dey, L.P.; Roxane Laboratories Inc.; and Warrick Pharmaceuticals Corp. inflated the prices of their respiratory disease medications, resulting in a more than $20 million overpayment by Medicaid since 1995. “Inflating the bottom line to capture market share amounts to stealing from Texas citizens,” Cornyn said at a news conference held in Austin on Sept. 7, the day the suit was filed in Travis County. The suit seeks to recover the alleged overpayments and more than $58 million in penalties. Cornyn alleged that the companies reported inflated prices to Medicaid and sold the drugs at much lower prices to pharmacies that were allowed to keep the windfall. For example, Cornyn alleged that Warrick charged Medicaid $40.30 per box for an asthma medication that it sold to pharmacies for $13.50. “The company has never acted to defraud the Texas Medicaid program. We believe Warrick’s pricing practices are in full compliance with all applicable laws,” says Warrick spokesman Bill O’Donnell. “The allegation is that we intentionally and falsely inflated the price of drugs to the Medicaid program. That allegation is false,” says Ursula Bartels, general counsel for the Bohringer Ingelheim Corp., Roxane’s parent company. “The allegations are simply false, and Dey intends to vigorously defend itself against these charges,” Charles Rice, president and chief executive officer of Dey, said in a statement.

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