The House Committee on Oversight and Government Reform held hearings in February where witnesses, including a U.S. associate deputy attorney general, testified that drug makers have been systematically overcharging Medicaid. The companies are required by law to provide Medicaid with the same discounts they offer to managed-care plans and hospital chains, but they have been disguising those prices, Ronald Tenpas, a U.S. associate deputy attorney general, told the committee.
There are 150 pending federal investigations centering on Medicaid and two other government health-care programs that could find billions of dollars more in pharmaceutical company fraud.
A majority of the investigations against the drug makers have come through use of a provision of the federal False Claims Act, which allows people who have evidence of fraud involving government programs or contracts to bring suit on behalf of the federal government. The Medicaid cases stemmed from complaints by company employees, sales executives and pharmacies.
Additional details are available in the February 18, 2007 issue of the New Jersey Star-Ledger.