Ten days ago Secretary of Health and Human Services Kathleen Sebelius announced that the US government was allocating $1 billion to help companies with production costs for a swine flu vaccine. Among the beneficiaries was French vaccine giant, Sanofi-Aventis, whose Sanofi Pasteur unit got a $190 million order. It was likely only the first in a series of expected orders for the company. Sanofi knows how to make vaccines. So what could go wrong?
Drugmaker Sanofi-Aventis has agreed to pay nearly $100 million to settle allegations it cheated Medicaid on the cost of nasal sprays.
The Justice Department said Aventis Pharmaceutical Inc., a wholly owned subsidiary of Sanofi-Aventis U.S. LLC, has agreed to pay the government $95.5 million to settle the charges.
The government charged that between 1995 and 2000, Aventis and its corporate predecessors did not offer Medicaid the best prices for the sprays Azmacort, Nasacort and Nasacort AQ.
Under the law, the company was required to tell Medicaid the lowest price that it charged companies for those products, and offer state Medicaid programs rebates based on those prices.
Prosecutors contend that in order to dodge that obligation, Aventis entered into a private deal with the HMO Kaiser Permanente that repackaged Aventis drugs under a new label, allowing them to overcharge Medicaid programs for the same product. (Devlin Barrett, AP; hat tip Health Care Renewal)
In other words, this supposedly ethical company cheated the program that provides medical care for this country’s poor by colluding with a large HMO to disguise the fact it sold its product to others at a cheaper price. Roy Poses at Health Care Renewal asks some pertinent questions related to the fact that while Sanofi-Aventis is not a person, the decisions to cheat the government and through it the poor, was made by specific people:
. . . while human beings authorized or committed the acts that got the organization in trouble, rarely do these people seem to suffer any negative consequences. At most, the organization may pay a fine. In this case, the fine was, in corporate terms, of modest size. However, even a large fine, however, may come out of dividends or the stock price, dispersing the cost to stock-holders, or out of salaries across the board. Thus, those who got the organization into trouble are unlikely to feel pain from it. Perhaps because of reverence for all organizations related to health care, and fear that the bankruptcy of any health care organization, even a health care insurance company, will leave patients in the lurch, prosecutors do not seem inclined to actually prosecute such organizations. The net effect, though, seems to be that dishonest executives of health care organizations can continue to act with impunity.Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade. (Roy Poses, HHealth Care Renewal)
The US attorney who helped negotiate the settlement said the government will “vigorously investigate those who scam the Medicaid system.”
He said this just days after that same government placed a $190 million dollar order for a swine flu vaccine. Since there isn’t enough vaccine productive capacity, declining to do business with Sanofi-Aventis is not an option. Bigger fines and considering possible criminal prosecutions would seem to be.
I hope Secretary Sebelius counts the silverware after dealing with these crooks.