Best Price and Inflated Drug Pricing Claims in Houston
Call Correro & Leisure, P.C. Today
Federal law prescribes that the government receives the best price for
drugs. Best Price is the lowest price the manufacturer sells a covered
drug to any purchaser in the United States, inclusive of cash discounts,
free goods, volume discounts and rebates. The Best Price provision ensures
that the government is being provided the lowest price on drugs.
To do this, drug manufacturers must pay rebates to the states to insure
that the Medicaid program is receiving the best price on covered drugs.
Finding the mythical needle in a haystack is easier than discovering what
the best price of a drug is. The current system literally puts the entire
process, practically unmonitored, into the hands of the very people who
abuse the system. The Medicaid drug rebate process is a system consisting
of five key players.
The key players area:
- The manufacturer,
- The wholesaler,
- The pharmacy,
- The Centers for Medicaid and Medicare Services (CMS)
- And the state Medicaid agencies.
However, the system mainly relies upon a three-way interaction between
manufacturers, the Centers for Medicaid and Medicare Services (CMS), and
the state Medicaid agencies.
Understanding How the Best Price System Works
The process is a very circular system. The manufacturer provides the Best
Price and Average Manufacturer Price (AMP) to CMS. CMS then calculates
the unit rebate amount, and provides that information to the state Medicaid
agency. The states then use the utilization data provided by the pharmacies,
and the unit rebate amount, to calculate the rebate owed to them by the
manufacturer. However, the entire system is based upon the manufacturer
honestly conveying to CMS the correct Best Price and AMP. Any mistakes,
intentional or unintentional, will cause an underpayment in rebate amounts.
Given the complex calculation issues, and the fact that manufacturers are
given the most crucial role in the process, best price schemes are so
common that it was the first health care area that Inspector Rehnquist
addressed. This is the one of the most frequent type of health care fraud
case, and has become a top priority for the Office of Inspector General
(“OIG”), Department of Health and Human Services (DHHS), and
other health care fraud enforcement agencies.
On April 28, 2003, the OIG released the final version of its Compliance
Program Guidance for the Pharmaceutical Industry (“Guidance”).
The Guidance reflects the government’s continuing concern about
sales and marketing practices by pharmaceutical manufacturers. Two of
the major risk areas addressed in the Guidance are the integrity of data
used to establish or determine government reimbursement and kickbacks.
The Guidance asserts that a manufacturer may be liable under the False
Claims Act if:
- (A) government reimbursement for a product depends partly on pricing information
reported directly or indirectly; and
- (B) the manufacturer knowingly or recklessly failed to report such information
completely and accurately.
Manufacturers’ reported prices should take into account discounts,
rebates, free goods contingent on a purchase agreement, up-front payments,
coupons, goods in kind, free or reduced-price services, grants, or other
price concessions or similar benefits offered to purchasers. The Guidance
stressed that accurate net prices must be calculated in bundled sales,
stating “any discount . . . offered on purchases of multiple products
should be fairly apportioned among the products.”
You Can Make a Difference in Curbing Healthcare Fraud
Both the federal and state government take best price fraud and other types
of healthcare fraud very seriously. But fraud often happens without their
knowledge, making it difficult to uncover and prosecute. This is why the
government needs help from people like you who work directly with individuals
committing the fraud. If you have knowledge of a pharmaceutical company
violating best price policies, it is important that you step forward to
help stop it. The government rewards whistleblowers by providing a portion
of the damages awarded in a lawsuit to compensate for their efforts.
Regardless of how you found out about the best price practice occurring
in your workplace, it is important that you immediately consult with an
experienced Houston best price fraud attorney. Your efforts can stop fraud
and save millions of dollars in taxpayer funds.
Contact our firm at (832) 384-9783 to get started!