Recently released figures from the federal government suggest that pharmaceutical fraud is becoming more common in California and around the country. On Feb. 8, the U.S. Department of Justice announced that it collected $2.2 billion in fraud settlements in the fiscal year that ended on Sept. 30. That figure has only been surpassed once in the agency’s history. Most of the money was collected from individuals or groups that were prosecuted under the provisions of the False Claims Act because they were involved in schemes to defraud Medicare.
Kickbacks
The largest of the settlements was paid by the maker of the multiple sclerosis drugs Tecfidera, Tysabri and Avonex. The pharmaceutical company was ordered to pay $843.8 million for offering kickbacks to physicians in the form of speaking and consulting fees. Another large settlement was paid by a drug maker that admitted to intentionally underpaying Medicaid rebates and using copay subsidies to reward doctors. Other forms of pharmaceutical fraud that led to settlements included billing the government for unneeded treatment and submitting false information or failing to correct inaccurate information.
Medicaid settlement
The California Department of Justice is also devoting more of its resources to combating pharmaceutical fraud. On Feb. 7, California Attorney General Rob Bonta announced that a Silicon Valley health care startup had agreed to pay $15 million to settle a Medicaid fraud case. Investigators discovered that the company would routinely submit bills to Medicaid for birth control drugs that patients had not asked for.
Rampant fraud
Figures from the USDOJ and CDOJ indicate that health care fraud has become a serious problem in the United States. Holding pharmaceutical companies financially responsible for their wrongdoing may recover some of the money that is lost to health care fraud each year, but what is really needed are stronger regulations and more vigorous oversight processes to prevent this kind of behavior in the first place.
