The long arm of the law caught up with 13 pharmaceutical companies for overcharging Medicaid customers in Massachusetts. The state will get $47.4 million back from these companies and a total of $69 million overall. Other states with help from the Federal Government are also going after the pharmaceutical companies and the fines collected are expected to grow substantially.
The way I understand it (and I am not 100% sure) is that Medicaid makes agreements with pharmaceutical companies on the prices to be charged to those on Medicaid. And apparently they are accused of false pricing, kick backs, and off-label promotion of the products. The state could have accepted a much smaller settlement as part of a federal case a few years ago but stuck to their guns and got their larger award.
I am not sure that the pharmaceutical companies are trying to be sneaky or intentionally break laws. I am sure they are ethical companies but practices such as these are not unknown in the business world. All it takes is a unscrupulous person or two and voila a crime occurs.
In an era of skyrocketing medical costs and local and federal governments strapped for cash, any violation should be prosecuted and moneys redeemed. Over charging for medications end up costing us tax payers a lot more in the long run.