Hawaii has collected $84 million over the past five years from drug companies for alleged Medicaid fraud. It is among the top states with the highest return on investment for its investigations. The amount the state has collected through litigation is 12 times what the state paid to prosecute Medicaid fraud cases from 2006 to 2011. This is according to a new report by Public Citizen, a Washington, D.C.-based nonprofit consumer advocacy group.
Of the 27 states that recovered money from drug manufacturers, Hawaii had the fourth-highest return on investment. The state spent $6.7 million on Medicaid fraud enforcement in the period and recouped $12.50 for every dollar spent. Sammy Almashat, health researcher with Public Citizen, observed:
These are states that have pursued these cases completely on their own without the help of the federal government. States expended their own resources to try to recover money for their own Medicaid programs. Pursuing and prosecuting pharmaceutical companies for fraud…can be exceedingly cost effective for the states that choose to prosecute. These investigations pay for themselves in the long run.
It was pointed out by Public Citizen that the Hawaii cases involved overcharging the Medicaid program for drugs for the state’s neediest population, which is the most common violation. On a federal level, cases also involved off-label promotion of medications, or illegal marketing activities to increase pharmaceutical sales. The $84 million Hawaii collected came from two cases. In 2010, Hawaii reached an $82.6 million settlement with a number of different drug companies in one case. In 2007 a Merck subsidiary paid the state $1.1 million in the other case. Almashat had this to say about Hawaii’s good work:
Sometimes these overcharges can be pretty astronomical. A small state like Hawaii getting an $82 million settlement is pretty significant. Pricing fraud has gone on for years, over decades or longer…which add up to a lot of money for state taxpayers and the Medicaid program. State budgets are constantly facing shortfalls and cuts so these settlements really are, in many cases, crucial for state Medicaid programs to continue to provide care for the states’ poor and disabled patients.
Almashat gave an example, unrelated to Hawaii, of a drug company charging Medicaid about $5,000 for 200 pills that should have sold for $80. Based on what we have learned in litigation, I could give numerous similar examples of how the companies are overcharging in other states for their drugs. In the December issue, we will report on a number of very good settlements made in AWP cases on behalf of other states. The details on those settlements were being worked out as this issue went to the printer.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.