Drug companies to pay 421 million USD for price scam

Dec 07, 2010

Three pharmaceutical companies have agreed to pay 421 million dollars for reporting inflated drug prices to the US government, officials said Tuesday.

The said that Abbott Laboratories, Roxane Laboratories, a US-based subsidiary of a German firm, and German drug maker Braun Medical Inc all agreed to pay the fines.

The three companies are accused of artificially inflating the prices of the drugs reimbursed by the federal government under the Medicare and Medicaid health care programs for elderly and low-income Americans.

Tony West, Assistant Attorney General for the Justice Department's Civil Division, said the companies were guilty of "offering their customers one price and then falsely reporting a greatly inflated price to the lists the government uses when determining how much to pay for the drugs," he said.

The fraud led to the government overpaying reimbursements by hundreds of millions of dollars, according to officials.

" created an incentive for the purchase of their drugs, since buyers could obtain government payment at the inflated price and pocket the difference," said West.

Authorities said, however, that they have recovered the overcharges and more in its settlements with offending companies over the unlawful pricing schemes.

Since January 2009, officials said they have reclaimed more than nine billion dollars in cases alleging false claims -- about half of those funds from fraud related to federal health care programs.

West said the price inflation scams are a drain on coffers and hurt health programs intended for the sick and elderly.

"Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices make for their patients," he said.

Explore further: New research demonstrates benefits of national and international device registries

add to favorites email to friend print save as pdf

Related Stories

Emerging $80B deal would help fund Medicare drugs

Jun 20, 2009

(AP) -- Medicare beneficiaries would receive better drug coverage and a portion of President Barack Obama's health care legislation would be paid for under an emerging agreement involving the pharmaceutical ...

Botox maker to pay $600M to resolve investigation

Sep 02, 2010

(AP) -- Allergan Inc., the maker of wrinkle-smoothing Botox, has agreed to pay $600 million to settle a yearslong federal investigation into its marketing of the top-selling, botulin-based drug.

Recommended for you

New approach to particle therapy dosimetry

16 hours ago

Researchers at the National Physical Laboratory (NPL), in collaboration with EMRP partners, are working towards a universal approach to particle beam therapy dosimetry.

Supplement maker admits lying about ingredients

Dec 17, 2014

Federal prosecutors say the owner and president of a dietary supplement company has admitted his role in the sale of diluted and adulterated dietary ingredients and supplements sold by his company.

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

ironjustice
not rated yet Dec 08, 2010
Nobody is going to jail ? When a person / company uses their licence to commit fraud USUALLY their ability to work IN that profession is usually removed ? If there is 'insider trading' the man loses his ability to trade ? HOW COME we don't just shut them down for a year or two ? Better YET all their drug income should be DIVERTED to Medicare for that period of time AND somebody ANYBODY goes to jail ? Imho.
VOR
not rated yet Dec 09, 2010
"The fraud led to the government overpaying reimbursements by hundreds of millions of dollars, according to officials" this sounds like they arent even paying a fine, just paying back all or part of what they stole. I agree the penalty is not nearly enough. there should be criminal charges envolved and fines should be a multiple of what was stolen since they dont catch all of these crimes. Based on this article it sounds like there is no risk in commiting this sort of fraud, since all you can lose is what you steal!

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.