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False Claims Act Update & Alert |
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Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG December 5, 2007 |
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False Claims Act Update & Alert
Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG December 5, 2007
n TAF Home Page
n Previous Newsletters
n Email editor
Please take a moment to forward this FREE electronic newsletter to others that might be interested!
Merck Settlement Expected
to Top $670 Million
Merck pharmaceuticals has reserved $670 million in expectation of settling a series of False Claims Act cases involving nominal pricing fraud. FCA lawsuits against Merck have charged the company with engaging in a kind of kickback scheme and/or overcharging Medicaid on three of its biggest selling drugs (Zocor, Vioxx and Pepcid) while giving 92% discounts on these drugs to private hospitals.
. .Under the rules governing Medicaid participation, drug companies must report and give Medicaid the "best price" for theirdrugs. Merck not only concealed the deep discounts it gave to for-profit hospitals, it also tied these deep discounts to hospital usage of the named drugs, thereby violating nominal pricing "safe harbor" provisions meant for charity hospitals
and clinics.
. . Merck's marketing strategy for Zocor, Vioxx and Pepcid appears to have been a classic "business plan" fraud: Get patients on long-term drugs for cholesterol, arthritis pain, and excessive stomach acid while they are still at the hospital, and then charge Medicaid inflated prices once the patients left the hospital and went home.
>> To read the Nevada complaint for Zocor and Vioxx, which is believed to closely parallel a federal complaint still under seal. >> To read about the Pepcid lawsuit.
$25 Million TVA Coal Settlement
Kinder Morgan has agreed to pay $25 million to settle a False Claims Act lawsuit and private claims related to the unauthorized sales of customer's coal. The FCA settlement of $19.8 million represents triple damages for shorting coal to the Tennessee Valley Authority (TVA), with an additional $5.2 million to go to settle the claims of private customers. >> To read more
$25 Million Wheelchair Fraud
Federal prosecutors have unsealed an indictment against Michael Cowen, co-founder of Active Solutions, for bilking Medicare and Medicaid out of more than $25 million for wheelchairs between 2002 and 2005. >> To read more
OK Doctors to Pay $1.5 Million
Gregory Pinegar, an Oklahoma doctor serving a 33-month federal prison sentence for fraud, has agreed to pay $1.5 million to settle a False Claims Act lawsuit charging him with defrauding Medicare for Procrit and Remicade injections he did not administer. >> To read more