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Friday, February 02, 2007

Feds Sue Ohio Drugmaker: 1000% Markups Alleged

CINCINNATI (TDB) -- The Justice Department entered a whistle blower lawsuit in Boston that contends a generic drug manufacturer in Ohio overcharged Medicare and Medicaid by more than $500 million, and that some prescription markups exceeded 1,000%.

The government says Columbus-based Boehringer Ingelheim Roxane Inc., which is commonly known as Roxane, "engaged in a scheme to report fraudulent and inflated prices for several pharmaceutical products, knowing that federal health care programs established reimbursement rates based on those reported prices."

Federal prosecutors intervened Monday, but somehow the action received scant attention. Roxane said it has complied with all law, and professed disappointment with the Justice Department's action.

[Ed Note: The only news report I found is this brief Associated Press report that did not spur much interest among the state's major media outlets. It does mention that Roxane is in Ohio. There might be more, but this does seems to fall under the category some of the news they seem to lose.]

Of course, soaring prescription drugs costs have been a major issue for years. Public discontent has led some Americans to go to Canada for cheaper prices, or to try Internet pharmacies that offer discount drugs. Medical costs, including drugs prices, have become an economic competitiveness issue. Old-line and unionized manufacturers are being crushed by health care expenses. And the cost of medicine played a huge role in last fall's election, with Democrats like U.S. Sen. Sherrod Brown contending Washington has been almost been a captive of the pharmaceutical industry.

Meanwhile, federal prosecutors said their case against Roxane is about the "spread" -- the difference between the inflated government reimbursement rates and the actual price paid by health care providers. The larger the "spread" the larger the profit on a drug.

"Fraudulent pricing practices in the pharmaceutical industry have provided illicit profits for pharmaceutical manufacturers and providers at the expense of of the taxpayer. Our intervention in this lawsuit is another example of our ongoing effort to combat these these practices and hold its perpetrators accountable for their misdeeds," Peter D. Keisler, assistant attorney general for the civil division said in a statement.

Maybe he was signaling that Washington finally is going to start digging into drug prices and looking for explanations behind the high costs. The company's Web site can be found byclicking here.

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