In what state officials describe as a record-setting verdict, a Travis County jury found Tuesday that a global drug manufacturer misrepresented prices to the state's Medicaid program and said the company should pay the state and federal government $170.3 million.
The verdict concluded a nearly three-week trial in state district court, where lawyers for the Texas attorney general's office argued that Actavis Mid-Atlantic LLC and co-defendant Actavis Elizabeth LLC artificially inflated the costs of medications to obtain more money. Medicaid reimbursed pharmacies at higher rates because of the falsely reported prices, officials said.
Actavis is apparently part of a multinational corporation based in Iceland that claims to have 10,000 employees. The company was taken private in 2007, and has not supplied financial reports since 2006 (see here), so the effect of the apparently large fine on its financial health is unclear, but I would guess not too severe.
'Actavis remains, as always, committed to offering high-quality, lower-cost alternatives for health consumers, including the millions of Americans who participate in the Medicaid program,' said John LaRocca, the company's vice president and chief legal officer.
A Dayton-based managed health care company agreed today to pay $26 million to settle allegations that it defrauded Ohio's Medicaid program.
CareSource, which provides managed care benefits to Medicaid recipients in Ohio and other states, was accused of failing to provide required screenings, assessments and case management for special-needs children and adults and submitting false data to make it appear as they had which allowed them to be reimbursed for services.
The settlement is a fraction of the $2.3 billion the state paid the company last year.
'Medicaid program dollars need to be used to do what they are intended to do -- and that is to provide health care to some of our most vulnerable citizens,' Attorney General Mike DeWine said in a statement released by his office.
CareSource officials denied the allegations, saying they agreed to the settlement simply to end the matter.
'Because we are a mission-driven organization and because it is the right thing to do, we have always dealt with our relationship with the state of Ohio and the management of Medicaid funds with the highest integrity,' said Pamela Morris, chief executive officer of CareSource, in a statement.
A spokesman for the Ohio Department of Job and Family Services, which oversees Medicaid, said CareSource will continue working for the state. 'The allegations are a cause for concern, but we are comfortable with the relationship and the terms of the settlement,' said Benjamin Johnson.
The continued march of legal settlements, and guilty pleas and convictions provide some measure of the current amorality of health care corporate leadership. But I do not expect that these frequent legal proceedings will induce leaders to become more ethical.
These two cases, one involving a Icelandic, multinational generic pharmaceutical company, the other a US based managed care company, showed how corporate misdeeds lead to an elaborate, theatrical, but ultimately ineffective ritual. The prosecution denounces the vileness of the deeds and the severe consequences. The corporation pays a fine that seems big to those down on the farm, but in reality is a tiny fraction of revenues. Despite the prosecutorial assessment of the severity of the offense, no charges against any individuals are pursued. The corporation denies anything bad happened, but reaffirms its commitment to a somewhat vague mission. Since nothing bad happened, the corporation does not punish any employees who authorized, directed, or implemented the bad behavior. Finally, those in government who have to continue to work with the corporation plod on without fuss.
The impression is that no one in government is really serious about deterring corporate misdeeds. Although there have been promises of a tougher approach that will actually hold corporate leaders personally accountable for the misdeeds that occurred on their watch, the theater continues.
So I say again: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.
Meanwhile, the continued unwillingness of government leaders to take on corporate leaders suggests how corporatist the US has become. Government for the corporations, by the corporations, and of the corporations, bodes no good for the people whose rights are increasingly being displaced.
Where again do the justice department lawyers working on theses cases find themselves next?
Perhaps in the employ of the industry they beat at 10 times the salary at the DoJ.
If we are going to shame someone, maybe it is the lawyers who construct these wrist slaps. Can we find out where they go next after creating or approving these inconsequential settlements?
Is there a chance any are being paid off during the case? Odd that that has never been reported even once, and with cash like this on the line from companies with this ethical history, it is seemingly reasonable to think they would do anything.
These cases are new, so I imagine the DOJ lawyers involved are still at DOJ.
select those in which the penalties seemed disproportionately small, identify the lawyers involved, and try to track where they are now.
Personally, I suspect the problem is not so much the individuals involved, but rather the pervasive atmosphere in government of friendliness to the leadership of large corporations that has been around since before the Clinton administration.
Afraid, if you want to discuss this further, email me at rposes at firmfound dot org.