HOUSE COMMITTEE EXAMINES DRUG PRICING FOR GOVERNMENT HEALTHCARE PLANS
Government healthcare programs must require more price transparency and better reporting to stop pharmaceutical companies from overcharging them for medications, according to experts and activists testifying at a House committee hearing last week.
The witnesses, appearing Feb. 9 before the House Committee on Oversight and Government Reform, charged the pharmaceutical industry with taking advantage of government-run healthcare programs, especially Medicare Part D, at taxpayers' expense. The system is open to fraud because few government programs know the actual prices they pay for specific drugs, Gerard Anderson, professor at the Johns Hopkins Bloomberg School of Public Health, said. Companies are required to report specific pharmaceutical pricing information to the Centers for Medicare & Medicaid Services, but this information is rarely analyzed, he added.
Most cases involve "best price" fraud or average wholesale price fraud, where companies misstate the lowest or average prices for their products and reduce the rebates they owe, James Moorman, president of Taxpayers Against Fraud, said. "I know of no other industry that rigs the government against the market more," Moorman added.
The industry continually uses illegal, inaccurate reporting practices, leading to significant losses for healthcare programs, Ron Tenpas, associate deputy attorney general at the Department of Justice (DOJ), said. The pharmaceutical industry has had to return more money from fraud cases to the federal government than any other industry, he added. However, the DOJ did not recommend any legislative action, and Tenpas said only that the agency needs more funding to investigate fraud allegations against the pharmaceutical industry.
Several speakers criticized Medicare Part D in particular, with Committee Chairman Henry Waxman (D-Calif.) saying the program "calls out" for more fraud. Part D pays substantially more for its drugs than other government plans, according to Anderson, but no one knows exactly what Part D is paying for specific drugs.