Hi-Tech Pharmacal in $25M Medicaid settlement

Hi-Tech Pharmacal Co. said Thursday it will pay $25 million to resolve allegations that it overcharged the Texas Medicaid program.

The Amityville company said it has already set aside money to cover the settlement with Texas and is not acknowledging any wrongdoing or liability.

In July, Hi-Tech Pharmacal said it had set aside $15.5 million to cover a potential settlement tied to an investigation by the Texas Health and Human Services Commission into the submission of price information. On Dec. 10 the company said it had put aside an additional $9.5 million for the settlement.

Hi-Tech Pharmacal also said Thursday that its shareholders have approved the sale of the company to Akorn Inc. and it expects the deal to close by the end of March. Akorn, based in Lake Forest, Ill., agreed to buy Hi-Tech in August for $640 million. Both companies make generic drugs.

Hi-Tech Pharmacal chief executive David Seltzer stands to receive nearly $85 million in the sale to Akorn, mainly through about $81 million in stock and vested options he owns, according to Securities & Exchange Commission filings.

Shares of Hi-Tech Pharmacal yesterday closed up 2 cents to $43.33.