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Schein probed over pricing
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August 10, 2000: 7:41 p.m. ET
Texas, New York, Florida among states investigating pricing policies
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NEW YORK (CNNfn) - Generic drug maker Schein Pharmaceutical Inc. is being probed by several states in connection with possible false reporting of information regarding its pricing policies, the company revealed in federal documents.
In an August 4 filing with Securities and Exchange Commission, Schein (SHP: Research, Estimates), a $440 million company that markets 70 generics, including off-patent versions of Novartis' Ritalin, said it was served with a Civil Investigative Demand from the Office of the Attorney General of Texas.
 The request seeks information about a single drug included in a program run by the state's Department of Health, which establishes the reimbursement rates for pharmaceuticals dispensed to Texas Medicaid recipients.
In addition, Florham, Park, N.J-based Schein, which is in the process of being acquired by Watson Pharmaceutical, has received notices or subpoenas from the attorneys general of other states, including Florida, Nevada, and New York. Other state and federal inquiries regarding pricing and reimbursements issues are anticipated, the company said.
"At the present time, management does not have any basis on which to determine the company's liability, if any, upon conclusion of these attorney general investigations, or whether the resolution of the investigations is likely to have a material adverse effect on the company's financial position, results of operations, or liquidity," the company said in its filed statement.
The company noted that any steps it may have to take to recover damages due to this investigation could adversely affect its bottom line, as would any significant limitation in government or third party reimbursement practices.
A company representative was not immediately available to comment on the information in the filing.
Schein has been cited several times by the U.S. Food and Drug Administration for deficiencies in manufacturing practices.
The company's Cherry Hill, N.J., facility has been closed since 1999 after the Food and Drug Administration searched the facility and found several manufacturing quality violations. 
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Schein Pharmaceutical
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