Medicaid pays out $500 billion a year. With so much money at stake, everyone scrambles to find new ways to reach their hands into the Medicaid cookie jar – whether they have any right to those cookies or not!
Even companies overseas see Medicaid as a good target. Recently, the largest pharmaceutical company in Europe was forced to repay the U.S. government more than $190 million for the lies and deceit it used to steal money from Medicaid.
Medicaid pays for many drugs needed by the elderly and certain low-income families. To ensure that the government does not pay inflated prices, all pharmaceutical companies must give Medicaid their "best price." It should be the same price they give their best customers. Sounds fair. And it is.
However, there is plenty of room for companies to lie to the government about the prices they charge their best customers for their drugs. Would you be surprised to learn that they do?
A French company, Sanofi-Aventis (Aventis), makes a popular drug, Anzemet, which helps prevent vomiting for patients undergoing chemotherapy.
Aventis wanted to participate in the Medicaid program so it could sell large volumes of pills in America, but it did not want to give the U.S. government its "best price" for the drug. Rather than forgo huge profits by selling to Medicaid patients, it chose the route of deceit. By lying, it cheated Medicaid of hundreds of millions of dollars.
Fortunately, a whistleblower with inside information noticed what was happening and stepped forward. He helped the U.S. government prove the fraud, which had grown to nearly $200 million. The company had charged Medicaid almost a quarter of a billion dollars more than it charged others for the same drug.
Even though Aventis lied and stole millions of dollars, it was not criminally prosecuted. It did not even apologize. Instead, the company issued a short press release in Paris, stating that it had decided to resolve the issue through settlement – without admitting any wrongdoing. In the end, Aventis simply repaid the money it should never have received in the first place. (The government did, however, make Aventis sign a compliance agreement that requires it to periodically disclose information to help ensure that it will not cheat Medicaid again.)
I am pleased to say that the American whistleblower who stepped in to stop this fraud received $32 million as a reward. Under the False Claims Act, the Department of Justice pays rewards of between 15 and 25 percent of what it recovers from those who cheat under any government program.
As taxpayers, we should not stand for paying inflated prices to giant drug companies that do not follow the rules and gouge Medicaid.
There are thousands of drugs subject to quarterly Medicaid rebates. If you know of a pharmaceutical company that is lying to the government about the prices it charges to its best customers, there could be a multi-million dollar reward waiting for you.