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Medicaid fraud by pharmaceutical industry
Key Excerpts from Article on Website of BusinessWeek magazine
Posted: December 17th, 2009
http://www.businessweek.com/bwdaily/dnflash/content/nov2009/...
A $112 million settlement involving alleged drug kickbacks that the Justice Dept. announced with the nation's largest nursing home pharmacy and a generic drug manufacturer on Nov. 3 is part of a wide-ranging investigation of suspected Medicaid fraud by the pharmaceutical industry. Critics say the continuing probe, which involves ... major drugmakers, highlights what they describe as an industry practice of paying money to outfits that provide drugs to consumers, in return for preferential treatment. Because those alleged payoffs have the effect of compromising patient care and driving up costs for government and private health insurers, cases like the settlement unsealed with Omnicare (OCR) in Covington, Ky., and IVAX Pharmaceuticals in Weston, Fla., could bolster opposition to the controversial deal the Obama Administration reached with the pharmaceutical industry to win its support for health-reform legislation. Many Democrats say the Administration should have asked for much bigger cost savings from drugmakers. Patrick Burns, a spokesman for Taxpayers Against Fraud, a nonprofit Washington group that promotes whistleblower suits, says the Justice Dept. is backed up with pharmaceutical fraud cases. Since drugmakers offer so many similar products, he contends, they rely on kickbacks to give their products a market edge. "In the pharmaceutical industry, the business isn't selling the best drug, it's the best scheme of kickbacks to the prescriber."
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