These false statements and representations have caused Texas Medicaid to overpay pharmacies for their drugs. An increased market share for the manufacturer means increased profits. Background on the Texas Medicaid Vendor Drug Program Medicaid is a state and federally funded program for health care for the indigent. Texas is the only state in the country which requires drug companies to certify the prices of their drugs to Texas Medicaid, and also requires the drug companies to report subsequent changes in pricing within 15 days of any change. TDH uses the drug companies' certifications to determine the amount that Texas Medicaid will pay to pharmacies for the drugs.
Pharmacies buy drugs either directly from the drug companies or from wholesalers.
When the pharmacy dispenses a drug to a Medicaid patient, the pharmacy submits a claim to Medicaid for payment. Then Medicaid reimburses the pharmacy using an amount that is based on the price certification from the drug company. The Texas Medicaid Fraud Prevention Act Found in chapter 36 of the Texas Human Resources Code.