Roxane Laboratories Drops Drug Access Lawsuit and Settles Litigation With State of Texas

30 November 2005

Roxane Laboratories, Inc. today announced that it has reached an agreement with the Texas State Attorney General's Office to settle litigation relating to the State's Medicaid drug program. Under this agreement, Roxane Laboratories agreed to drop its lawsuit against the State of Texas for unlawfully preventing Roxane's medications from being used by pharmacies which participate in the Texas Medicaid program. Additionally, Roxane agreed to pay approximately $10 million to Texas in exchange for having its low-cost generic medications included in the Texas Medicaid program. The State of Texas dismissed its lawsuit against Roxane regarding drug pricing and agreed to clarify and provide guidelines for compliance with state Medicaid procedures. This agreement ends five years of litigation between Roxane and Texas. "We are gratified that as part of this settlement, the Texas Attorney General has stopped blocking Roxane Laboratories' medications from inclusion on the Texas State Medicaid Formulary and has agreed to articulate its Medicaid reimbursement guidelines and reporting requirements going forward. As a result of this outcome, we have agreed to drop the lawsuit we filed against the State of Texas and consider this action to be a victory for patients that rely on Medicaid drug assistance. Roxane Laboratories has always endeavored to comply with the maze of conflicting and confusing State and Federal Medicaid prescription drug formulary guidelines and is committed to making low-cost generic medications available to Medicaid patients," stated Tom Murphy, President and Chief Operating Officer of Roxane Laboratories, Inc. "Like other states, the Texas state Medicaid system has serious flaws that limit patients' choices and increase costs. The flaws hurt the poor who rely on Medicaid and the pharmacies who volunteer to participate in the Medicaid program. Instead of fixing the problems, Texas Medicaid attacked the pharmaceutical industry. Attacking drug companies in court makes good headlines, but it will not solve the problems. Other states, like Michigan, save tens of millions of dollars every year because they fixed the same problems Texas spent years litigating. This agreement requires Texas to include Roxane's low-cost generic drugs in the Medicaid program and provides guidelines to help keep drug costs low in Texas," stated Steve McConnico, name partner at the law firm of Scott, Douglass, and McConnico. The federal Medicaid Act defines when a state must include drugs in its Medicaid program.(1) Rather than complying with federal law, the state of Texas defined its own regulations, which are unique among the States and do not comply with federal guidelines. Texas regulations do not follow the federal law, nor do Texas regulations currently provide clear guidance on state Medicaid pricing for companies. Rather than comply with federal law and clarify Medicaid pricing guidelines, the state of Texas has chosen to sue many companies for failure to comply with the state's confusing reimbursement requirements. Roxane Laboratories, Inc. (Columbus, Ohio), is a subsidiary of Boehringer Ingelheim Corporation, based in Ridgefield, Connecticut, and a member of the Boehringer Ingelheim group of companies. The Boehringer Ingelheim group is one of the world's 20 leading pharmaceutical companies. Headquartered in Ingelheim, Germany, it operates globally with 144 affiliates in 45 countries and nearly 36,000 employees. Since it was founded in 1885, the family-owned company has been committed to researching, developing, manufacturing and marketing novel products of high therapeutic value for human and veterinary medicine. For more information please visit http://www.boehringer-ingelheim.com . Reference: (1) The federal Medicaid Act defines certain permissible restrictions the states may impose that would keep particular drugs from being listed on the formulary, but none of those restrictions are applicable here. 42 U.S.C. Section 1396r-8(d) (1-6). Contact: Mark R. Vincent Communications & Public Relations Boehringer Ingelheim Pharmaceuticals, Inc. Phone: (203) 798-4412 Cell: (203) 482-6309 Fax: (203) 791-6442 E-mail: mvincent@rdg.boehringer-ingelheim.com

Source: PR Newswire

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