Tuesday, June 07, 2005

Fraud Probes of Big Pharma

The current investigation of drug company fraud could net a billion dollars in fines, according to state and federal prosecutors.

The charges are that the drug companies cheat state and federal health-care programs by inflating prices, while giving secret discounts to non-governmental buyers. They also charge that they are selling more expensive drugs that aren't approved for the purposes they are being used for, instead of selling the right drug at a much lower price.

According to the Wall Street Journal, Peter Keisler, who oversees the Justice Department's civil-fraud unit, said that "the most frequent defendant in fraud cases today is in health care" and that the industry now accounts for "the lion's share of fraud, both in number of cases and dollar amounts -- and those numbers are going up."

The Journal goes on to give a shocking example of this behavior:
[Drug maker] Abbott faces pricing-fraud claims brought two years ago by California's attorney general, based on alleged overcharges to government-paid drug programs for vancomycin, a powerful antibiotic. Abbott is alleged to have reported to the state Medi-Cal program an average wholesale price of $55 a dose while charging pharmacies only $6.29 a dose. The alleged scheme, apparently intended to help the drug gain market share, cheated taxpayers by falsely setting a high reimbursement rate, the suit said. Under Medicaid rules, companies are generally required to give the government the best price that they give to any purchaser of a drug.

But what do you expect from an industry that cares more about profits than lives?

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