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PHARMA: US attorney cracking down on drug companies, by Matt Quinn

From THCB’s legal office, Matt Quinn is back on the track of health care fraud once again.  This time he’s turned his attention from Medi-Cal to big pharma:

The new edition of "Fortune" (the one with, as I remember, Andy Fastow in handcuffs on the cover) also has a great article about the efforts of the Michael Sullivan and his US Attorney’s office in Boston to crack down on fraud by the pharmaceutical industry (only first part avail free).  In a speech at this year’s Pharmaceutical Marketing Congress in Philly that, I’m sure, went over like a fart in church, Michael Loucks (who runs the health care Fraud unit in Sullivan’s office) lectured the assembled industry leaders:

    "Since 2000…drugmakers (have) coughed up more than $2.2 billion to settle such civil and criminal violations as kickbacks to doctors, overcharging, and marketing drugs for unapproved uses…No other sector of the health-care industry," he said, "has ever paid similar amounts in health-care fraud investigations in so short a time."

While some suspect that Sullivan has higher political ambitions and is simply attacking big pharma because it’s an easy target with deep pockets, the US Attorney’s office states that its main concern is "that drug companies are corrupting medical judgment by paying off doctors, then passing on those costs to consumers."  Strict oversight, he argues is "pro business."  That whistleblowers get a cut of the judgment doesn’t hurt either.

According to the article, in 2002 the average American incurred $5,037 in medical costs.  By 2010 that number is expected to jump 60% to $8,368.  As much as 10% of that pricetag, the article postulates, is fraud.

With a trend (see this article in AIShealth’s Government News) of reinvesting money from Medicare and Medicaid fraud back into healthcare, wouldn’t a great use for this money be to invest in 1) beefed up investigation and oversight efforts and 2)  a task force to simplify and streamline Medicare’s rules?  While this would ultimately (hopefully!) be a self diminishing revenue stream, it would serve the good of the taxpayer by driving efficiency in the healthcare system as a whole while focusing enforcement efforts on those who intend to defraud vs. those  who are simply confused with the rules.  And best of all it would be totally self funding (with, perhaps, a little left over for investment back into the provision of care).

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Billions have been recovered from settlements over the years, from what approaches about 2 dozen pharma companies. Presently, according to http://www.taf.org, there are hundreds of pharma fraud cases pending presently.