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Healthy Skepticism Library item: 14553

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

Ratcliffe H.
St. Louis jury says pharmaceutical companies cheated Medicaid
ST. LOUIS POST-DISPATCH 2008 Oct 31
http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/59273167BA18A55D862574F30012983A?OpenDocument


Full text:

Three pharmaceutical companies will have to pay at least $7.3 million to the state of Missouri after a St. Louis jury found Thursday that they overcharged Medicaid for prescription drugs.

The jury sided with the Missouri attorney general’s office, which claimed the companies schemed to boost profits by artificially inflating their “average wholesale price” on three drugs for respiratory ailments.

Late Thursday, jurors returned to deliberations on punitive damages, which would have to be paid atop the $7.3 million in actual damages.

“This is a simple case of fraud by reporting false prices,” Rex M. Burlison, chief of the attorney general’s office in St. Louis told the jury this week. “Do I get indignant when I see stealing from the state Medicaid program? … You betcha.”

The companies, Warrick Pharmaceutical, Schering Corp. and Schering-Plough Corp., were “marketing the spread,” Burlison said, encouraging pharmacies and other health care providers to buy their brands by creating a large difference between the average wholesale price and the actual cost. The average wholesale price is a factor in how much Medicaid reimburses for drugs for the poor.

Mike Moore of Dallas, who represents the pharmaceutical companies, called the average wholesale price a “sticker price” from which both sides could negotiate. He said Missouri’s own policies were responsible for any overpayment. He said state officials knew what the average wholesale prices were and never objected until the lawsuit.

“The state controls the Medicaid reimbursement system,” Moore said. “There is no evidence that we hijacked the system.”

As many as 20 other states have suits against these same companies, making similar allegations. The companies won the only other case to get to trial so far, which was in West Virginia, officials said.

Another company originally named in the suit, California-based Dey Inc., settled with the state.

Warrick and Schering are a subsidiary of New Jersey-based pharmaceutical company Schering-Plough, which specializes in generic drugs. The total net worth of the three companies exceeds $10 billion, Burlison said.

The trial, which was scheduled to start last month, was delayed when potential jurors grumbled about their selection for jury service. Judge David Dowd declared a mistrial and attorneys selected a new jury last week.

 

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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