Another Drug Maker to Settle Justice Dept. Fraud Suit

by Deb Cupples |  Last week, I blogged about drug giant Wyeth, which agreed to settle a Justice Department fraud suit after the company allegedly (and knowingly) "failed to give the government the same discounts it provided to private purchasers of its drugs, as required by laws governing the Medicaid program. 

Wyeth's reported failure simultaneously saved the company hundreds of millions of dollars -- while costing us taxpayers the same amount. 

Today, I learned that drug maker Aventis has agreed to settle a Justice Department fraud suit for $95 million after the company allegedly engaged in conduct similar to Wyeth's conduct.  The Justice Department reports:

"Aventis Pharmaceutical Inc., a wholly owned subsidiary of sanofi-aventis U.S. LLC, has agreed to pay the United States $95.5 million to settle allegations that it violated the False Claims Act by misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations, the Justice Department announced today.

"The settlement resolves allegations that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the Medicaid Drug Rebate Statute, Aventis was required to report to Medicaid the lowest, or "best" price that it charged commercial customers, and pay quarterly rebates to the states based on those reported prices.

"In order to avoid triggering a new best price that would obligate it to pay millions of dollars in additional drug rebates to Medicaid, Aventis entered into 'private label' agreements with the HMO Kaiser Permanente that simply repackaged Aventis’s drugs under a new label. As a result, Aventis underpaid drug rebates to the Medicaid program and overcharged certain Public Health Service entities for these products." (DoJ)

This wasn't simply a one-time accounting error -- not for Aventis and not for Wyeth.

Does anyone still wonder why our nation's drug and health care costs are so high?  If you do, then see some of the posts linked at the end of this one.

Related Buck Naked Politics Posts:

* Contractor Fraud Driving up Health Care Costs

* Geithner on Mediare Crisis: Two Possible Solutions not Mentioned

* Insurance Companies Get Away with Overbilling Medicare

* Private Insurers Milking Medicare (i.e., Seniors & Taxpayers)  

* Smoke & Mirrors: Health Care Industry Pledges to "Stem" Cost Increases?

* Why Drug Prices are so High: GAO & Other Sources

* Drug Companies Scammed Taxpayers, Cancer Patients, Others

* Death by Hospital (Infection), Consumers Union Wants Congress to Act

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