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Healthy Skepticism Library item: 1053

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

 

Publication type: news

Glaxo and Bayer Settle U.S. Medicaid Fraud Charges
REUTERS 2003 Apr 16


Full text:

CHICAGO (Reuters) – GlaxoSmithKline Plc and Bayer AG Wednesday reached the
biggest-ever Medicaid fraud settlement with U.S. prosecutors on charges the
drug makers inflated prescription drug prices, company and government
sources said.
The U.S. Attorney’s Office in Boston said it plans to announce the deal at a
briefing later Wednesday
Bayer, based in Germany, agreed to pay $257 million to settle allegations it
cheated Medicaid, the U.S. health plan for the poor, for drugs such as
Cipro, the popular antibiotic used during the U.S. anthrax scare last year,
according to a plaintiff’s lawyer.
Glaxo agreed to settle for $87.6 million with the U.S. Attorney’s office “to
avoid delay and expense of a trial,” it said in a statement.
Soaring drug prices and strapped state budgets are leading U.S. attorneys
and states to crack down on abuse of the Medicaid system by various market
players.
For a drug maker to take part in the joint state-federal Medicaid program,
which covers roughly 36 million needy children, adults and disabled people,
it must offer the government the “best price” on its pharmaceuticals.
“They must have the goods on these guys because the way that statute was
written provides a good amount of wiggle room” for drug companies to set
prices, said Ira Loss, a health care expert at Washington Analysis.
Britain-based Glaxo did not admit wrongdoing and said the disagreement
stemmed from “an ambiguous aspect” of the Medicaid pricing law.
Bayer and Glaxo officials were not immediately available for comment.
California, New York, Florida, Illinois, Texas and Pennsylvania will also
recover damages are part of the settlement, according to a lawyer for a
plaintiff suing Bayer.
An official at the U.S. Attorney’s Office in Boston confirmed the Medicaid
settlement is the largest ever, though would not verify the amounts.

 

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Far too large a section of the treatment of disease is to-day controlled by the big manufacturing pharmacists, who have enslaved us in a plausible pseudo-science...
The blind faith which some men have in medicines illustrates too often the greatest of all human capacities - the capacity for self deception...
Some one will say, Is this all your science has to tell us? Is this the outcome of decades of good clinical work, of patient study of the disease, of anxious trial in such good faith of so many drugs? Give us back the childlike trust of the fathers in antimony and in the lancet rather than this cold nihilism. Not at all! Let us accept the truth, however unpleasant it may be, and with the death rate staring us in the face, let us not be deceived with vain fancies...
we need a stern, iconoclastic spirit which leads, not to nihilism, but to an active skepticism - not the passive skepticism, born of despair, but the active skepticism born of a knowledge that recognizes its limitations and knows full well that only in this attitude of mind can true progress be made.
- William Osler 1909