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Wednesday, May 12, 2010

SD Joins Lawsuit to Protect Gov't Health Care from Corporate Fraud

Now here's a health care lawsuit AG Jackley is right to pursue: South Dakota is joining sixteen other states to sue pharma-giant Wyeth for cheating Medicaid out of hundreds of millions of dollars. The suit alleges Wyeth gave hospitals big rebates on certain drugs but did not report or pass on those discounts to the state Medicaid programs.

See, when the states stand to get money, Marty Jackley is all about government health care. Now if he AG Jackley would just look up the Frontier States Amendment, he might drop that other silly health care lawsuit he filed in March.

And a note for folks girding for the battle over cost-control in health care: you can grumble about a granny here taking advantage of Medicare or an unemployed mom there abusing Medicaid to get some fancy medical treatment, but when one business can cheat taxpayers out of several hundred million dollars... well, maybe we should be concentrating on the big fish, not the small fry. Go get 'em, Marty!


  1. Medicare Fraud is costing billions of dollars each year. That's why it doesn't make any sense to overhaul the entire system rather than fine-tune what we have. Identify the problem areas, fix those and impose massive penalties for fraud, then focus on getting more legal American citizens covered.

    Same is true of banking and Wall Street. Identify the problems, whether it is controlling derivatives, scrutinizing credit applications, identifying fraud...Fix the problems rather than toss the baby out with the bath water. We have good systems, but every good system needs to be tweaked and refined regularly or it will steer off course, which is what we've seen.

  2. It is rather sad that as a private business, Wyeth cannot offer discounts to its customers based on actions or conditions those customers must meet first, like buying two separate drugs bundled together, without being forced to discount its products to the medicaid program, which doesn't have to do anything at all to demand that benefit. If they find Wyeth failed to abide by law they'll pay, but it just shows Cory's bias that he piles on and calls it fraud when the discount quite reasonably might not apply to anything Medicaid was buying. Cablevision sells TV,phone,and internet bundled together for a lower price - that doesn't mean they were offering any one part for a lower price and I wouldn't be dishonest to quote my lowest price for TV at the unbundled price.

  3. Roger-

    Actually, the way that medicare prices drugs is a compromise made with the drug company when the prescription drug benefit was added in the mid 2000's.

    Originally, medicare and medicaid were going to use their massive subscriber base to negotiate very low prices simply because they could buy in volume. However, the drug companies didn't like this because it would drive down their profits and lobbied heavily against it.

    THE DRUG companies suggested the current system of "best advertised price". This wasn't government, top down. This was government taking into account private industries concerns and coming to a compromise that the drug companies found acceptable.

    This is an example of a drug company not abiding by their agreement with the government. This isn't the government coming down and telling them how to run their business.

  4. Tony, stating that they are not abiding by their agreement is an assumption now supported by the situation. The bundled prices are not the same as the prices for the specific parts in the bundle, so Wyeth was correct when it charged the government plan the higher price for the specific drugs. This is not a case of fraud. I couldn't care less if the current system was influenced by the drug companies to be more favorable than it would have been under a government system 'negotiating' prices. They managed to get something bad but manageable rather than something entirely ridiculous, kudos.


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