Rep. Waxman on Pharmaceutical Pricing Fraud; Schering Settles

Yesterday, Lewis Morris, Chief Counsel to the Inspector General, testified before the U.S. House Oversight and Government Reform Committee, on Allegations of Waste, Fraud and Abuse in Pharmaceutical Pricing: Financial Impacts on Federal Health Programs For yesterday's actual testimony, click here. To watch a brief video clip showing Mr. Morris, and an interview with Rep. Waxman on Bloomberg's Money and Politics, click the window below.

Play Video

Rep. Waxman Probes Pharma Fraud - Bloomberg

Bloomberg - (BLOOM)

Feb. 09, 2007. 05:00 PM EST

Are drug makers profiteering. at people's expense?

A number of drug companies have made settlements with the federal and state governments so far. Below, a report on Schering's settlement with the state of Louisiana from the State's Attorney General's office. Schering-Plough Corporation has paid the State and federal government nearly $7.6 million in damages and penalties. Fifty states, including the District of Columbia, participated in the settlement. The conduct at issue with Schering, a Pennsylvania-headquartered manufacturer of a wide variety of pharmaceutical products, fell into three categories: Scherings exclusion of certain price discounts from the formula used to calculate Medicaid Program rebates and resulting underpayment of those rebates for the allergy drug Claritin Redi-Tabs and the potassium supplement K- Dur; the improper off-label marketing of brain cancer medication Temodar; and the companys payment of illegal remuneration to physicians to induce them to prescribe hepatitis drugs PEG-Intron and Rebetron, and bladder cancer medication Intron-A. Resulting losses to state Medicaid Programs were in excess of $80 million which, under the terms of the national settlement, Schering has repaid along with penalties, resulting in a total Medicaid recovery of $203 million. Under the terms of Louisianas settlement, the state will recover nearly $2.5 million for Louisiana, with the balance of $7.6 million going to the federal government to reimburse its share of the Medicaid costs. The civil settlements with Schering further require the company to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, in order to monitor the companys operations and ensure compliance with the law in the future. Additionally, in connection with the settlement, a Schering division pled guilty in federal court in Boston to criminal charges related to this conduct.