Wednesday, November 2, 2005

Not Everything Has to Be White Collar Crime

The government has the power, ability, and discretion to "punish" individuals and corporations using civil mechanisms.  DOJ issued a press release yesterday showing a civil settlement in a case  involving King Pharmaceuticals.  The press release states that the company "has agreed to pay $124 million plus interest to resolve allegations that it underpaid rebates owed under the Medicaid program and overcharged various federal and state governmental entities for its drug products." The press release further states:

"The government alleges that from 1994 through 2002, the company failed to report accurately the average manufacturer price (AMP) and best price (BP) for its Medicaid-reimbursed drugs. AMP and BP are used to calculate a quarterly rebate payment that each participating manufacturer must make to each state Medicaid program. They are also used to determine the ceiling price for drugs purchased under certain federal and state drug programs, and by agencies such as the Veterans Administration and entities subsidized by the Public Health Service. King’s misreporting of both AMP and BP’s across its entire product line resulted from the absence of appropriate internal systems and controls and improper methodologies used to calculate the erroneous figures."


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