by Deb Cupples | The dishonest dealings aren't the shocker: the guilty plea is. The Justice Department reports:
This is not the first time that BMS has had "questionable" dealings with taxpayers and the public.
In June 2007, BMS was one of three companies ordered to pay damages after overcharging patients, pension funds, insurers and Medicare for certain drugs. The New York Times reported:
"The plaintiffs argued that the drug makers had sold medications to doctors at steep discounts to the “average wholesale price” that Medicare and pension funds paid, while secretly encouraging them to claim full reimbursement from insurers. The plaintiffs are seeking hundreds of millions of dollars in damages.
"In a 183-page opinion, Judge Saris wrote: 'The Medicare statute itself created a perverse incentive by pegging the nationwide reimbursement for billions of drug transactions a year to a price reported by the pharmaceutical industry, thus putting the proverbial pharmaceutical fox in charge of the reimbursement chicken coop. The different pharmaceutical companies unfairly took advantage of the system by setting sky-high prices with no relation to the marketplace....'
"Bristol-Myers, of New York, caused the publication of false and inflated average wholesale prices for five drugs, including Taxol, which had spreads as high as 500 percent. Warrick, a subsidiary of Schering-Plough, which is based in Kenilworth, N.J., inflated average wholesale prices for its generic drug albuterol sulfate in a range of 100 percent to 800 percent, the judge said.
This is not the first time that BMS got heat over the cancer drug Taxol.
The NIH discovered Taxol in the 1960s and spent nearly half a billion dollars on research (GAO report # 03-829). That was taxpayer money.
The NIH gave Bristol-Myers exclusive rights to market Taxol: the deal was that Bristol-Myers was supposed to charge reasonable prices, given that we taxpayers had funded the drug's development.
In 2001, Bristol Myers reportedly sold Taxol for about $1,700 per month -- though it cost only about $90 to manufacture a month's supply. According to the GAO, we taxpayers spent nearly $700 million on Taxol through the Medicare program from 1993-2002.
Other Buck Naked Politics Posts:
* Why Drug Prices are So High: GAO and Other Sources
* Private Insurers Milking Medicare (and Seniors and Taxpayers)
* Drug Companies Scammed Taxpayers, Cancer Patients
* Contractor Fraud: Driving up Healthcare Costs?
* FDA's Latest Pharma-Friendly Sins
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