Israel-based Teva Pharmaceutical Industries Ltd. will pay $135 million to Illinois as settlement for resolving allegations that it inflated the wholesale prices used in setting the rates for Medicaid reimbursements.

Illinois' Attorney General Lisa Madigan had filed a lawsuit in 2005 against Teva Pharmaceuticals USA Inc. and 46 other drugmakers for deceptive practices related to wholesale prices of numerous prescription drugs.

The lawsuit claims that the companies fraudulently published inflated average wholesale prices, used by Medicaid programs to determine the reimbursement amounts for the drugs, which resulted in an overpayment of drug costs by the state.

Madigan said her office has "recovered more than $436 million for the state of Illinois from drug companies that engaged in unfair conduct."

The 2005 lawsuit is continuing against nine remaining manufacturers, according to a Jan. 10 news release.