Corporate Compliance

Feds investigate drug company pricing fraud allegations

Compliance Monitor, June 8, 2005

In advance of a January law that will increase government spending on prescriptions under the Medicare program, the United States has stepped up its pricing fraud investigations of some of the world's top drug manufacturers, United Press International (UPI) reported June 7.

According to the report, the U.S. government has about 150 open investigations as of June 7. If the allegations against the companies prove true, the resulting settlements could net more than $1 billion this year, UPI reported.

The government is investigating whether manufacturers are defrauding federal programs by "inflating prices, offering undisclosed rebates to distributors, or marketing drugs for unapproved uses," according to UPI. So far, investigations have resulted in fines and penalties from six major pharmaceutical manufacturers, with at least three more facing possible penalties later this year.

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