In Vivo is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Medicaid Fraud Scorecard

Executive Summary

Pharma's $2 billion in payouts since 2000 to settle claims of fraudulent Medicaid-related marketing and pricing practices has left the industry in flux, as it seeks to determine the kinds of packages and programs that will pass government muster. It appears that the strength of many current and presumed future fraud cases will be based on establishing a company's reasonable foreknowledge of the activities of its customers, with the argument even extended to gray areas including improper encouragement of off-label drug usage and the development of data to support those uses--issues that will affect device companies at least as much as Pharma.

You may also be interested in...



The Perils of Part D

The Medicare drug benefit means more federal spending on pharmaceuticals-and more oversight of the industry. Two prominent prosecutors are experienced and ready. The first place they will look: contracting between manufacturers and plans and its influence on the formulary selection process.

Prosecutorial Zeal Comes to the Device Industry

The government is taking aim at medical device companies; in May 2004 it caught Augustine Medical in a sting operation. Augustine paid the US government $12.75 million to settle claims relating to Medicare Fraud and moves to the top of a list that already includes large companies Guidant Corp. and Fresenius AG, which have both paid large sums of money to settle allegations of improper sales, marketing or billing practices that fall within the scope of the False Claims Act. (See Exhibit 1.) Now Medtronic Inc. is the subject of an investigation that alleges that payments and services to surgeons by its Medtronic Sofamor Danek division constitute kickbacks, and the billing and coding practices of Stryker Corp. are also under scrutiny. Medical device companeis are nervous. The pharmaceutical industry has already paid more than $1 billion to settle such cases; and medical device companies, which are subject to exactly the same regulations as pharmaceutical companies with regard to sales, marketing and medical education practices, are perhaps even more vulnerable because the very way they do business involves close relationships with physicians at all stages of development and marketing.

Prosecutorial Zeal Comes to the Device Industry

The government is taking aim at medical device companies; in May 2004 it caught Augustine Medical in a sting operation. Augustine paid the US government $12.75 million to settle claims relating to Medicare Fraud and moves to the top of a list that already includes large companies Guidant Corp. and Fresenius AG, which have both paid large sums of money to settle allegations of improper sales, marketing or billing practices that fall within the scope of the False Claims Act. (See Exhibit 1.) Now Medtronic Inc. is the subject of an investigation that alleges that payments and services to surgeons by its Medtronic Sofamor Danek division constitute kickbacks, and the billing and coding practices of Stryker Corp. are also under scrutiny. Medical device companeis are nervous. The pharmaceutical industry has already paid more than $1 billion to settle such cases; and medical device companies, which are subject to exactly the same regulations as pharmaceutical companies with regard to sales, marketing and medical education practices, are perhaps even more vulnerable because the very way they do business involves close relationships with physicians at all stages of development and marketing.

Topics

Related Companies

UsernamePublicRestriction

Register

CO200859

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel