Healthy Skepticism Library item: 11897

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

Silverman E.
Pharma Fines Are Filling The Treasury
Pharmalot 2007 Nov 2
http://www.pharmalot.com/2007/11/pharma-fines-are-filling-the-treasury/

Full text:

Drugmakers aren’t the only ones, of course. But the Justice Department says it obtained $2 billion in settlements in fraud cases during fiscal year 2007, with most of the recoveries resulting from whistleblower lawsuits, the Associated Press reports.

Approximately $1.45 billion of the settlements resulted from whistleblower lawsuits in fiscal year 2007, which ended Sept. 30, the department said. The individuals who filed suit were awarded $177 million. Under the False Claims Act, whistleblowers can sue companies or individuals that they believe have filed fraudulent claims with the federal government and, if successful, they can receive from 15 percent to 30 percent of the proceeds, the AP notes. Health care fraud accounted for most of the settlements, with $1.54 billion stemming from cases involving programs such as Medicare and Medicaid.

As we know, the department is cracking down on various practices by drugmakers, such as inflating the price of drugs that are reimbursed by federal programs, paying kickbacks to docs and pharmacists to induce drug purchases and for off-label promotion. In one of the largest settlements, Bristol-Myers Squibb and one of its former subsidiaries agreed in late September to pay $515 million to settle federal and state allegations that it illegally promoted its anti-psychotic drug Abilify for several off-label uses.

In other settlements, oil and gas company ConocoPhillips’ Burlington Resources subsidiary paid the federal government $105.3 million in August to settle claims that it failed to pay sufficient natural gas royalties, the department said. ConocoPhillips bought Burlington Resources last year. Meanwhile, the big software company, Oracle, paid $98.5 million early in fiscal 2007 to resolve allegations that PeopleSoft, which it acquired in 2005, had overcharged the government on numerous contracts.