New Report Details How Big Pharma Cheats Medicaid to Inflate Revenue
A collaborative investigation between the Center for Public Integrity (CPI) and NPR unveiled the extraordinary and potentially illegal lengths that pharmaceutical companies employed to boost their Medicaid sales. While Medicaid is required to cover almost all drugs, states set up systems to keep drug costs down by putting more effective and cheaper drugs on a “preferred” drug list.
According to the report by the CPI and NPR, pharmaceutical companies have resorted to underhanded tactics to circumvent the state system and get doctors to prescribe the costlier drugs.
Some of these underhand tactics their report found included the following –
- Lobbying state lawmakers to make favorable legislation
- Pretending to be from doctors offices, filling out paperwork and calling Medicaid to preauthorize drugs
- Wining and dining influential doctors on all-expense paid retreats
- Paying doctors in the form of lunches, dinners, travel, and consulting fees to speak on behalf of drugs
- Paying doctors who sit on committees that advise state Medicaid programs speaking or consultation fees
- Paying for state Medicaid officials to attend top conferences where drug representatives will be in attendance
- Instructing nurses what symptoms would get Medicaid to cover the more expensive drugs
One of the boldest offenders was the drug company Warner Chilcot, now owned by Allergan. Warner Chilcot pleaded guilty in 2015 to felony health care fraud and agreed to pay $125 million in civil and criminal fines. The accusations against Warner Chilcot included employees submitting false information to states, using payments and perks to influence doctors to prescribe their drugs, and violating privacy laws by going through patient records.
Medicaid pays for the health care of 76 million poor or disabled Americans using state and federal tax dollars. Medicaid is typically one of the largest expenditures in states’ budgets, and under the Affordable Care Act, the program expanded even further.
According to the NPR and CPI report, Medicaid accounts for more than a quarter of 26 states’ budgets and between 2008 and 2016 Medicaid drugs costs grew almost 50 percent per patient. As the cost of Medicaid grows, the money for other government services such as education and roads shrink.
“When those drug prices are high, it means either we have to cut things in our state budget or we can’t afford the care,” said Louisiana Health Secretary Dr. Rebekah Gee. “That’s unacceptable.”
You can read the full report on The Center for Public Integrity.