Criminal Prosecution of Teva Pharmaceuticals
In August 2010, Teva Pharmaceuticals paid $100 million to resolve allegations that Teva knowingly reported inflated drug prices and thereby caused the submission of false claims to the Medicaid program. Many of the state Medicaid programs established their reimbursement rates for drugs based on the average wholesale prices reported by manufacturers such as Teva to three leading pricing compendia. By inflating the prices they reported to the compendia, Teva and other manufacturers could cause the government to set reimbursement rates far above the actual prices paid to them by their customers, such as retail pharmacies. The manufacturer would then "market the spread" between the actual prices it charged its customers and the amount the government would later reimburse the customer, in order to induce higher sales.
Source: HHS Health Care Fraud and Abuse Control Program, Annual Report for FY 2010
This article was posted on July 15, 2012.