tci Medicare Compliance & Reimbursement - 2003 Issue 20

Pharmaceuticals: PRIVATE LABELING LEADS TO CRIMINAL FINES

The feds mean business when it comes to drug pricing improprieties. Case in point: A federal judge May 8 sentenced Bayer Corp. after the company pleaded guilty to a felony charge connected with a private labeling scheme. Judge Richard Stearns ordered the company to pay a $5.6 million criminal fine. The fine is just the tip of the iceberg, however. The company also will pay about $250 million to settle related civil claims. The Department of Justice maintains that Bayer engaged in "private labeling" for Kaiser Permanente. Bayer gave Kaiser a low price and affixed slightly different labels...

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