Pharmaceutical Fraud: Kick-backs Limit Patient Choice

hospitalOne of the many ways that patients are at the mercy of their health care providers and insurers is through pharmaceuticals and prescriptions. Doctors write specific prescriptions, sometimes based on pharmaceutical advertisements, that may require that patients receive name brand drugs. Insurers place limitations on the types of drugs that insureds can access. Another way that insurers and pharmaceutical companies have been limiting patient options is by engaging in health care fraud in order to increase profits at the expense of patient choice. Luckily, False Claims Act lawsuits have exposed pharmaceutical fraud, and actions have been taken against some major perpetrators.

Medco Fraud Settlement

According to the Corporate Crime Reporter, former AstraZeneca employees filed a qui tam lawsuit against AstraZeneca, a pharmaceutical manufacturer, and Medco, a company that manages pharmacy benefits. The lawsuit alleged that Medco and AstraZeneca entered into hidden financial agreements based on which Medco received lower prices on three AstraZeneca drugs in exchange for including one of AstraZeneca’s medications as the only one of its kind on some of Medco’s list of covered prescriptions.

In January, AstraZeneca reached a $7.9 million settlement with the U.S. government, which was followed in May by a $7.9 million settlement with Medco.

Anti-Kickback Statute Protects Patients and Consumers

In the lawsuit against AstraZeneca and Medco, the U.S. government alleged that the financial arrangement between the two companies violated the Federal Anti-Kickback statute. The statute is designed to protect patients, as well as federal health care programs, from fraud by prohibiting the exchange of money, or anything of value, for the referral of federal health care program business. Anyone who violates the statute may be guilty of a felony, and the crime is punishable by up to five years in prison in addition to financial penalties. Many states have their own anti-kickback statutes, that might have different provisions and requirements. California has several different statutes that are designed to guard against kickbacks and fraudulent health care agreements. Contact our attorneys to learn more about California’s anti-kickback laws.

The statute includes several safe harbor provisions for certain types of agreements, including exceptions for space rental, equipment rental, and personal services and management contracts. According to the National Law Review, several new proposed safe harbor provisions are being considered by the Office of Inspector General of the U.S. Department of Health and Human Services. Among the provisions being considered are exceptions for waivers or reductions by pharmacies of cost-sharing obligations from Medicare Part D, waivers for emergency ambulance services (so long as the ambulance offers the reduction or waiver uniformly, regardless of individual patient circumstances), and agreements between federally qualified health centers and Medicare Advantage organizations.

Medco manages pharmacy benefits for the Medicare Retiree Drug Subsidy Program, which means that formularies for Medicare consumers may have been affected by the arrangement. The government argued that claims made under the Retiree Drug Subsidy Program for AstraZeneca’s drug, as the sole drug of its type on the allowable prescription list, were false or fraudulent.

If you have witnessed health care fraud, including kickbacks or compensation in exchange for referrals or benefits that might impact patients’ health care decisions, you can help hold those involved accountable. Contact our attorneys to learn more about your options.


See Related Blog Posts:

Medicare Drug Theft: Report Finds Pricey HIV-Drugs Dispensed After Death

How the Federal Government Fights Health Care Fraud

Medicaid Fraud: Health Care Fraud Targeting Another Government Program

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