Healthcare fraud crackdown reveals pharmaceutical companies among America's top defrauders

By Rick Ungar

A Dept. Of Health & Human Services report out today reveals that the government managed to reclaim $4 billion dollars in health care rip-offs last year – the largest amount ever recovered from those attempting to defraud seniors and taxpayers.

Working in concert through the Health Care Prevention & Enforcement Action Team (“HEAT”), the Justice Department and HHS were able to track down the $4 billion improperly collected by a wide array of bad guys between October 1, 2009 and September 30, 2010.  As you would expect, a chunk of the fraud was the work of seedy operators turning in Medicare claims for wheelchairs that were never sold to recipients who never knew they needed mobile assistance. Then there were the run of the mill physician overcharges, billing scams, etc.

But get this – a full one half of the money ripped off was done at the hands of some of the largest pharmaceutical companies in the nation.

Some examples from the past year in drug crime and civil wrongdoing of the corporate variety -

Fortune 500 company, Allergan, (AGN) paid the government $600 million to settle criminal and civil charges arising from the company selling their Botox product as a remedy for headaches – despite forgetting to get FDA approval to do so.

Novartis (NVS) coughed up $422.5 million to get rid of criminal and civil liability problems for illegally marketing some of their products.

AstaZeneca (AZN) kicked in $520 million for marketing an anti-psychotic drug for uses not approved by the FDA and for paying kickbacks to doctors.

While these companies clearly are the poster children for increasing government regulation, we shouldn’t judge the entire industry by the behavior of the few. Maybe most of the drug businesses play it by the book.

Or not.

In fact, the entire pharmaceutical industry is much, much worse when it comes to not playing by the rules, defrauding the taxpayer and illegally pushing drugs in a way that can damage or kill people.

The fines imposed on each of the 2009-2010 rogues gallery is a mere drop in the bucket when compared to what Pfizer paid into the government till in the year preceding the period covered by today’s report. Pfizer’s payment of a $1.2 billion fine for illegally promoting their drugs for uses not approved by the FDA not only established an all-time record for the pharmaceutical industry but was the largest criminal fine ever paid in our nation’s history.

And still, Congressional Republicans tell us that over-regulation of America’s industries are at the very heart of all that ails us.

Maybe they are right. Maybe a pharmaceutical industry freed of the regulatory shackles that force them to defraud our seniors and the nation’s taxpayers in order to maintain their position as one of the most profitable industries in our economy, would be a kinder, gentler, more loving industry without the government telling them what to do.

After all, this life of crime is really not their fault. They’re simply a product of their regulatory environment.

In fact, the next time you see a drug company executive walking off the 18^th green or heading into a five star restaurant, go on up and give that executive a big hug. Tell her you understand. Let that person know you feel her pain.

Why?

Because the drug companies didn’t really want to break the law – it was the devil government that made them do it.

Link.