While the pharmaceutical industry is a fast-growing sector of healthcare, different types of fraud are committed and reported to the government. Pharmaceutical fraud and abuse is a growing concern, which also involves prescription drug abuse and drug misuse with millions of lives at stake. It is the responsibility of employees in the pharmaceutical industry to look out for fraudulent practices within their own companies.
What are the effects of pharmaceutical fraud on patients, doctors, other medical providers, and the federal funds? How are these drug manufacturers caught for such ill practices? What does the government do to regulate the production of medicine and medical supplies, and punish fraudulent drug manufacturers?
Check out these crimes involving pharmaceutical fraud you need to watch out for:
Best Price Fraud
The law mandates pharmaceutical companies to report the lowest prices for medicines to help patients who are disabled and retired to have access to quality and affordable medications. Under the Medicare Rebate Program, drug manufacturers should give rebates to patients who have purchased medicines above the reported prices.
The reported best prices by drug manufacturers should take into consideration grants, coupons, discounts, and other incentives. However, some drug manufacturers take advantage of the Medicare Rebate Program by reporting higher prices of medicines while decreasing their liability.
This type of pharmaceutical fraud is usually difficult to uncover and, in most cases, only progresses and becomes prosecuted with the help of whistleblower lawsuits.
Off-Label Marketing Fraud
Any form of medication should undergo testing and regulation of the Food and Drug Administration (FDA) to ensure that is is safe to use for the intended medical condition it claims to treat or cure. The FDA is responsible for determining the purposes of medications and whether the recommended dosage set by a pharmaceutical company is safe to consume.
In order to get rid of the strict testing, inspection, and approval of the FDA, some drug manufacturers misrepresent how a medicine can be used. A drug manufacturer that is promoting or selling drugs for any other reason is committing pharmaceutical fraud, specifically off-label marketing fraud.
Drug Switching Fraud
Drug switching fraud involves billing and switching government health insurance programs, such as Medicaid and Medicare, for different drugs other than the ones prescribed. Many pharmacies are enticed to commit this type of fraud because of the large amount of profit involved. However, many drug switching cases are only prosecuted because of whistleblowing lawsuits.
However, drug switching costs taxpayers millions of dollars every year because of the replacement of branded prescriptions with generic or inexpensive medications, wherein pharmacies bill health insurance programs for expensive medicines to gain more profit.
Here are the effects of drug switching according to the survey conducted by Harris Interactive and commissioned by Project Patient Care:
Auto-refilling programs help increase patient adherence, most especially among patients with chronic conditions, such as diabetes or asthma. These programs were designed and developed to enable patients to get prescriptions automatically refilled each month without calling in, visiting doctors, or going online every time to order new refills.
However, auto-refilling programs are sometimes abused by pharmacies that continue to refill prescriptions. It happens even if patients stop taking auto-refill medications, thus committing auto-refilling fraud. Pharmacies bill insurers, such as Medicaid or Medicare, for these auto-refills, and sell the prescription to other patients to earn more profit.
Here are the reasons why regulators try to prohibit automatic refill programs:
Physicians or other healthcare providers are not allowed to encourage or induce referrals for medicines and medical services paid by Medicare, Medicaid, and other federal health programs, which are paid for by federal funds.
There has been a common internal practice among pharmaceutical companies to bribe healthcare providers and facilities to prescribe medicines even if these are not recommended or proven effective. If a doctor or healthcare worker uses any compensation or payment to prescribe drugs or encourage a patient to come to the facility to avail medical services, it is considered a kickback.
Medical or sales representatives sometimes bribe doctors and other healthcare professionals, who are licensed to prescribe medicines, into prescribing the medication they sell. Pharmaceutical companies involved in this pharmaceutical fraud often give commissions and incentives for reaching a sales quota monthly.
Here are some other examples of illegal kickbacks:
These activities compel healthcare providers to prioritize financial needs instead of the well-being of patients. That’s why such forms of bribery violate the rules governing Medicare and Medicaid, and the federal law. Most of all, prescribing less effective medications or drugs that aren’t tested can compromise the health and safety of the public.
Medicare Part D Fraud
Drug pharmacies that are accepting Medicare Part D should provide medications through Pharmacy Benefit Managers (PBMs) or directly to eligible beneficiaries. After which, claims are submitted to the Part D program. The source of fraud in this program stems from some pharmaceutical professionals who unjustly bill the price of medications.
Here are some examples of Medicare Part D fraud, which costs taxpayers millions of dollars and put the health of patients at risk:
Good Manufacturing Practice Violations
Drug manufacturers should comply with the stringent rules of the government on the maintenance of good working order of manufacturing facilities, like the Good Manufacturing Practice or GMP. This system ensures that products, like medicines and medical supplies, are consistently produced, tested, and controlled according to international quality standards.
Here are the facts about GMP:
However, some pharmaceutical companies neglect and even purposely miss the requirements to abide by the rules and laws of good manufacturing practices, thus committing violation. A drug manufacturer proven to commit this type of fraud could be either fined or shut down, or both.
These types of fraudulent pharmaceutical practices put the health and safety of millions of patients at risk. Also, taxpayers pay millions of dollars on fraudulent claims every year, which are supposedly intended for disabled, elderly, and low-income patients. Pharmaceutical fraud ruins the lives of many people due to ineffective, unreliable, misuse, and abuse of medications caused by corrupt pharmaceutical practices.