Drug Company Sidelined for Kickbacks

"Pharmacia excluded permanently from participation in all federal health care programs." Yahoo News

Pharmacia and Upjohn Company Inc., a unit of Pfizer Inc. was sentenced to pay a criminal fine of $19.68 million related to its guilty plea of offering a kickback to a pharmacy benefit manager. Read a report here and here. Pharmacy benefit managers can properly and often do recommend drugs [a list of recommended drugs called a "formulary"] to health plans. The problem with Pharmacia, according to Prosecutors, is that it offered the pharmacy benefit manager of a Federal health plan inflated payments in the amount of $12.3 million.

This is not an isolated case. Last year Schering-Plough, the maker of Claritin was subject to federal criminal anti-kickback charges, but was merely placed under a strict scrutiny for 5 years. These cases are clear evidence that Americans are being bilked for over-priced prescription drugs, that pharmaceutical companies are exploiting the system for maximum profit and that the practice is widespread. Enforcement under the Federal Anti-Kickback Statute reaches drug companies' financial relationships with foreign physicians and hospitals as well and so will likely be stepped-up to combat these illegal practices.