KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Drug Companies Accused Of Skirting Requirement To Submit Prices

Drug makers frequently ignore a federal requirement that they submit "pricing data needed to calculate discounts on medications prescribed for poor people under Medicaid, federal investigators say in a new report," The New York Times reports.

"The information is not submitted at all, is filed late or is incomplete, the investigators said, and as a result Medicaid overpays for prescription drugs. The problem, they said, could become more significant under President Obama's new health care law, which increases the amount of the discounts and promises to add millions of people to the Medicaid rolls. In a new initiative intended to force compliance, Daniel R. Levinson, the inspector general at the Department of Health and Human Services ... said he would impose civil fines on drug manufacturers that fail to meet their price-reporting obligations. ... The government has had this authority since 1990 but has not used it, the inspector general said" (Pear, 9/2).

Meanwhile, in a second story, The New York Times investigates lawsuits against pharmaceutical companies for antipsychotic drugs, such as Abilify and Geodon. "Big Pharma got behind them in the 1990s, when they were still seen as treatments for the most serious mental illnesses, like hallucinatory schizophrenia, and recast them for much broader uses, according to previously confidential industry documents that have been produced in a variety of court cases. ... The drugs were given to a broad swath of patients, from preschoolers to octogenarians. … Yet recent government warnings say the drugs may be fatal to some older patients and have unknown effects on children."

Now, "[t]he new generation of antipsychotics has also become the single biggest target of the False Claims Act, a federal law once largely aimed at fraud among military contractors. Every major company selling the drugs ... has either settled recent government cases for hundreds of millions of dollars or is currently under investigation for possible health care fraud" (Wilson, 9/2).

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