June 2005 – State and Federal Prosecutors Investigating 150 Cases of Alleged Pricing Fraud by Largest Pharmaceutical Companies
The June 7 issue of the Wall Street Journal reported that “the cases are part of an expanding industry wide investigation of drug pricing that has produced scores of lawsuits currently under seal in courts around the country. They are focused on allegations that drug companies cheat state and federal health-care programs by inflating prices, offering undisclosed rebates to distributors or marketing drugs for unapproved uses, according to lawyers and officials involved in these cases. Prosecutors also could force these companies to accept "corporate integrity agreements" that include tough federal oversight of the way the companies price and market drugs under government-paid health-care programs, including Medicaid and Medicare.”
The government and its investigative tenacity are not going away any time soon. The government has recognized the need to address and eliminate the existence of healthcare fraud for decades. In 1993, Attorney General Janet Reno named healthcare fraud as the second major new initiative of the Department of Justice, second only to violent crime.
The increase in cases against pharmaceutical companies reflects how aggressively federal and state governments are prosecuting healthcare fraud. In fact, the OIG continues to improve the efficiency of the Department of Health and Human Services and to punish those who defraud its programs. On June 13, 2005, the Office of Inspector General reported savings and expected recoveries of nearly $17 billion. Compare that to the year 2000, when savings and recoveries totaled $1.2 billion—an incredible increase in just five years where savings and recoveries have experienced an increase of over 1400%.
Of importance to the healthcare and pharmaceutical industries:
- Compliance within the healthcare and pharmaceutical industries is real. State and federal law enforcement agencies are more aggressively using all possible tactics to address healthcare fraud and abuse.
