More and more, I’m thinking there’s plenty of money floating around our “health care system” that might be better spent on actually delivering health care:
Three drug makers agreed Tuesday to pay $421 million to settle U.S. claims that they bilked federal health-care programs out of millions by greatly inflating the price of their drugs. According to the Justice Department, Abbott Laboratories Inc., Roxane Laboratories Inc. and B. Braun Medical Inc. reported false prices to the government to get larger Medicare or Medicaid reimbursements for the doctors and pharmacists choosing their drugs. The actual price was often a fraction of the reported price, the government alleged, allowing doctors and pharmacists to pocket the difference. The practice amounted to “a kickback scheme funded by taxpayer dollars,” said Assistant Attorney General Tony West.
Oh, looky here. They had a little inside joke:
“This practice was widespread in the pharmaceutical industry — so widespread in fact that average wholesale price, AWP, it was jokingly said, really stood for ‘Ain’t What’s Paid,’” Tony West, assistant attorney general for the Justice Department’s civil division, said today at a news conference in Washington. “Indeed, the only purchasers who paid the full inflated reported drug price were you, the American taxpayers.”
The difference between the inflated government payments and the price paid by health-care providers for a drug was known as “the spread,” and profits for doctors or pharmacists increased as the spread widened, U.S. officials said.
The cases were originally brought as whistleblower suits by a Florida company called Ven-a-Care of the Florida Keys Inc. The government later joined the suits under the so-called qui tam provisions of the False Claims Act, which allows whistleblowers to share in any proceeds that the government recovers as a result of their information.
Here’s qui tam, if you’re interested (pdf):
The statute, first passed in 1863, includes an ancient legal device called a “qui tam” provision (from a Latin phrase meaning “he who brings a case on behalf of our lord the King, as well as for himself”).