If the Government Does Not Receive the Best Prescription Pricing Is that Fraud?

Government funded health care programs buy billions of dollars in prescription pharmaceutical products for program beneficiaries every year.  Because the government is a reliable purchaser of such huge quantities of these products year in and year out, it insists that pharmaceutical manufacturers that want to sell their drugs under the Medicare and Medicaid programs must agree to sell their products to the government programs at the lowest or best price at which the manufacturer sells to private non-government buyers, such as wholesalers, pharmacists, HMOs, Group Purchasing Organizations, and other private sector customers.  This is enforced through the Medicare Rebate Program which requires every pharmaceutical company selling its products to Medicare and Medicaid to review its sales every quarter for any special pricing, rebate or discount it might have offered to determine whether the government actually got the Best Price for the company’s products that quarter.  If the government did not get the Best Price that quarter, the company must provide a rebate to the government program.   

Pharmaceutical manufacturers too commonly are tempted to go around this requirement because they can often induce private insurance companies, wholesalers, pharmacists and other health care providers to use their products by offering them a price below the best price charged to the government programs.  The pharmaceutical manufacturers intentionally hide these arrangements using separate side agreements with private insurance companies, wholesalers, pharmacists and other health care providers so they can avoid giving the government programs the Best Price. Manufacturers may also intentionally fail to report discounts, rebates or special pricing in order to avoid paying the rebates contemplated under the Medicare Rebate Program.  In other schemes, manufacturers have re-characterized their deals with private buyers as things like educational grants in order to conceal instances where a private buyer is getting a better price than the government.  Whatever the scheme, these rebates, hidden price deals or reduced pricing violate the Medicare and Medicaid Best Price requirements which can be a violation of the federal and state False Claims Acts.

If you believe someone has knowingly committed Medicare or Medicaid fraud relating to the price of prescription pharmaceutical products purchased by the government and you would like more information about how this may be the grounds for bringing a Medicare or Medicaid whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you.  The whistleblower lawyers at Keller Grover understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.