U.S. drug companies defrauded Medicare with price fixing scheme, rules judge

[babylonsister]

U.S. drug companies defrauded Medicare with price fixing scheme, rules judge
Thursday, March 13, 2008 by: David Gutierrez


(NaturalNews) A federal judge has ruled that three pharmaceutical companies artificially marked up their prices in order to defraud Medicare and encourage doctors to prescribe their drugs over those of competitors.

The decision came in a class-action lawsuit against AstraZeneca, Bristol-Meyers Squibb, Johnson & Johnson and Warwick Pharmaceuticals, a subsidiary of Schering-Plough Corp. U.S. District Judge Patti Saris ruled against AstraZeneca, Bristol-Meyers Squibb and Warwick, while clearing Johnson & Johnson of "egregious misconduct."

However, she described even Johnson & Johnson's actions as "troubling."

Saris agreed with the plaintiffs' complaint that the drug companies deliberately inflated their average wholesale prices in 2003, when those prices were still used to determine Medicare reimbursements. This created a gap between the prices that Medicare was paying and the (lower) prices charged to doctors and pharmacies. This meant that doctors would actually be reimbursed more than they had paid for the drugs, creating a profit incentive for doctors to prescribe certain products.

The judge ruled that AstraZeneca had overcharged for its prostate cancer drug Zoladex and ordered the company to pay nearly $4.5 million to one of the two groups of plaintiffs. Likewise, she found that Bristol-Meyers Squibb had overcharged for the cancer drugs Blenoxane, Cytoxan, Rubex, Taxol and Vepesid, and ordered the company to pay $183,454. She said that she needed more information to set damages amounts for the other group of plaintiffs.

more...

http://www.naturalnews.com/022835.html

[Donnachaidh]

1. Well, it's about time someone found against Big Pharma

"Sicko" brought the point home for me on meds. WHY is it that an Albuterol puffer is 25 CENTS in Cuba, but here in the states it's twenty five DOLLARS - and THAT's the co-pay price? :grr: :wow: :grr:

[PA Democrat]

2. Jeez. Profiteering on cancer treatment drugs. You can't get any lower than that.

I want these crooks to go to jail. What they do is far worse than the guy serving time for robbing the local convenience store. The problem with slapping a fine on the company is that the individuals who made the decision to fix prices do not really suffer the consequences.

[TZ]

3. True. You know who is gonna suffer for this, most likely?

The people in the labs..the biologists and chemists. We (and yes, I am one) are usually the first to feel the axe when one of these big companies do things like this (I know a lot of people who were laid off from Merck after the Vioxx debacle).

[PA Democrat]

4. I'm not surprised. That's what I saw in the banking industry as well in the 1980's

when the greed and excesses of the guys in the corporate office caused huge losses. I had to lay more than 13% of my staff off, and my staff worked in one of the few areas of that bank that was profitable. My experiences of over a decade in banking are a big factor in why I am a progressive.