Florida Pharmacists Win $597 Million Blowing Whistle

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T. Mark Jones learned about the costs and benefits of health-care delivery when he treated AIDS patients in Key West, Florida, in the late 1980s. The pharmacy he co-founded -- unusual at the time -- provided a humane last step for gay men who didn’t want to spend their final weeks confined to a hospital.

Jones, a registered nurse, went into homes to dispense infusion-therapy drugs and teach patients to care for themselves.

“I was worn out,” he says. “But I loved it.”

His dream job began to unravel in 1991, when a national health-care chain came to Key West to open an AIDS clinic. It secured the support of local doctors by offering them padded insurance reimbursements, Jones says, Bloomberg Markets magazine will report in its September issue.

Referrals to Jones’s pharmacy, Ven-A-Care of the Florida Keys Inc., dried up. By the late 1990s, Jones had hit bottom. Broke and bereft, he borrowed money from friends and maxed out credit cards. In 1999, he moved his wife and two children into his parents’ home in Key West.

“I just got to the point where we couldn’t survive anymore,” he says.

Jones, now 57, turned his misfortune into a mission ignited by the company that nearly destroyed him. National Medical Care Inc., then a unit of W.R. Grace & Co. (GRA), planned to prescribe medications for patients based on how much profit they would generate, Jones says.

Overbilling Medicare

He and his two partners decided to investigate exactly how NMC was making money. They found it was overbilling Medicare, cheating U.S. taxpayers. This practice, they later discovered, was widespread.

Big Pharma was routinely reporting inflated drug prices, leading Medicare and Medicaid to overpay doctors and pharmacies by billions of dollars. Jones and his partners dedicated their lives to exposing that hard-to-detect scheme.

Ven-A-Care, operating from a quiet street in Key West, has filed whistle-blower lawsuits against dozens of pharmaceutical companies since 1995 -- many later joined by the U.S. and states -- that have recovered more than $3 billion for the U.S. government.

In those settlements, Ven-A-Care secured awards totaling $597.6 million for suing on behalf of taxpayers, making it the most successful whistle-blower in U.S. history.

Saved Billions

No industry has felt the sting of whistle-blowing more than health care. Since 1988, whistle-blowers have helped the U.S. government recover $24.2 billion, and 75 percent of that involved medical treatment, according to the Department of Justice. The pace is accelerating. Since 2009, 91 percent of the $10.6 billion recovered has come in health-care cases.

Ven-A-Care stopped a scheme that was costing taxpayers billions of dollars a year, says Suzanne Durrell, a former U.S. prosecutor who worked on the pharmacy’s first case.

“They figured out these pricing scams were going on that affected virtually every drug manufacturer in the United States,” Durrell says. “Because they were a pharmacy, they could easily get a lot of inside information on what the industry was doing and charging.”

As a result of Ven-A-Care’s actions, at least 24 pharmaceutical companies settled civil lawsuits and an NMC unit pleaded guilty to U.S. criminal charges. Largely in response to Ven-A-Care’s evidence, Congress passed the Medicare Modernization Act of 2003, says Charles Clapton, a former counsel to the House Committee on Energy and Commerce.

The Scheme

The Congressional Budget Office estimated that the law saves taxpayers $15.7 billion per decade.

The scheme Ven-A-Care revealed worked like this:

Drugmakers sold medicines to pharmacies, hospitals and doctors at one price and then falsely reported higher amounts to independent publishers of pricing data. Medicare and Medicaid relied on the figures pharmaceutical companies reported to those firms to set reimbursement rates.

For example, Abbott Laboratories (ABT) sold its antibiotic Vancomycin 1 GM FTV to customers for $4 a dose, according to a joint Justice Department and Ven-A-Care lawsuit. Abbott reported the cost to pricing publishers as $72.48 -- 18 times the actual amount, the lawsuit says.

Abbott, based in Abbott Park, Illinois, denied liability and settled that case, which involved dozens of drugs. It paid $126.5 million to the U.S. government in 2010.


Florida Pharmacists Win $597 Million Blowing Whistle on Scheme - Bloomberg (external - login to view)
L Gilbert
Yep, the neoChristian gawd = Mammon. Very hard to find real Christians among the wealthy.
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