The Justice Department has joined a whistleblower lawsuit against Abbott Laboratories and its spinoff, Hospira. The companies allegedly conspired to inflate Medicare and Medicaid reimbursements on some drugs.
It is alleged that Abbott Labs reported its drug prices to price publishers (like Drug Topics Red Book) at levels up to 1,000 percent higher than the prices the company charged doctors and hospitals. Inflated list prices allowed doctors and hospitals to request reimbursements from Medicare and Medicaid that were much higher than the prices actually paid. This profit for the doctors and hospitals, in turn, induced them to use more Abbott Labs drugs, so the company increased its own sales and profits.
The conspiracy allegedly went on from 1991 to 2001, and the Justice Department says that Medicare and Medicaid reimbursed doctors and hospitals over $175 million for the Abbott drugs at issue in this case. Under the False Claims Act, the government may recover treble damages and $5,500 to $11,000 for each fraudulent reimbursement claim.
The whistleblower lawsuit was originally filed against Abbott Labs by Ven-A-Care of the Florida Keys Inc., a home infusion company.