Wednesday, September 12, 2007

$190 Million Settlement for Sanofi-Aventis

I had the feeling that once we got through the August doldrums, the floodgates of stories of health care organizations behaving badly would open up. It turns out I was right. This story was picked up by the wire services, e.g., from Reuters,

A U.S. subsidiary of drugmaker Sanofi-Aventis has paid about $190 million to federal and state governments to settle charges that it overcharged Medicare for an anti-nausea drug, the Justice Department said on Monday.

Aventis Pharmaceuticals, now known as Sanofi-Aventis U.S. Inc, agreed to make the payment to resolve allegations that the company artificially inflated the price the Medicare program paid for Anzemet, a drug used to prevent nausea and vomiting in patients undergoing radiation treatment, the department said.

The department said Aventis increased the cost of Medicare reimbursement for Anzemet by inflating the reported price for the drug, which are used to set reimbursement rates.

$190 million here, $190 million there, soon it adds up to real money.

Again, this is one of many, many stories of how the ever enlarging and more powerful organizations that dominate health care, in this case, a pharmaceutical company, but including biotechnology companies, medical device companies, health care providers, hospitals and health care systems, managed care companies and health insurers, health care information technology companies, etc, etc, etc, are willing to go right up to, and often over the legal line. The resulting fine may just be their cost of business, often just taken out of the stock-holders profits. Almost never does a high corporate executive pay any penalty in these cases. So there is little incentive for the leaders of these organizations to stop pushing the envelope. But the result is a health care system that collectively puts the self-interests of its organizations' leaders before the interst of patients or the advancement of science.

I have said that before, haven't I?

1 comment:

Anonymous said...


Merck, J&J, and Wyeth have all been selected to explain certain tax treatments by the US Senate per rule FIN 48. WSJ Sept. 11, 1007 Why Firms' Tax Cuts Get Senate Attention. Merck has a potential tax liability of $7.4B

FIN 48 basically creates a liability line item for questionable tax treatment. Merck's was the largest out of 361 companies studied.

Steve Lucas