Report: Kentucky leads nation in pursuing pharmaceutical fraud

bmusgrave@herald-leader.comSeptember 27, 2012 

Attorney General Jack Conway made remarks after winning the election at the Frankfort Convention Center for the Democratic election party on Tuesday November 8, 2011 in Frankfort, Ky. Photo by Mark Cornelison | Staff

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FRANKFORT — Kentucky is one of the most aggressive states in the nation for rooting out pharmaceutical fraud, according to a report released Thursday by a non-profit watchdog group.

Public Citizen, a Washington, D.C., group that focuses on consumer and other issues, examined states' efforts to go after pharmaceutical companies for deceptive practices. The report looked at all legal actions and settlements by the federal government and by the states.

Since 1991, Kentucky has pursued the most claims against pharmaceutical companies and reached more than 30 settlements.

States can file individual claims against a pharmaceutical company or join other lawsuits brought by other states. Kentucky has pursued the most single-state settlements, with 17.

Attorney General Jack Conway's office oversees Medicaid fraud, which prosecutes claims against pharmaceutical companies. "This report is a testament to both the hard work of General Conway's staff and his ongoing commitment to combating pharmaceutical fraud," said Shelley Johnson, a spokeswoman for Conway. "Since General Conway took office in 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $265 million for the state and federal Medicaid programs."

Since 2009, state governments have finalized more than twice as many settlements, for more than six times as much money, as they had during the previous 18 years, according to the report.

"It should come as no surprise that states facing Medicaid budget shortfalls are finally deciding to root out fraud that likely has cost their taxpayers billions of dollars over the years," said Dr. Sammy Almashat, a researcher with Public Citizen and the study's author.

Since 1991, state and federal settlements with the pharmaceutical companies have generated $30.2 billion. This year could set a record, with $6.6 billion in settlements reached by July.

The most common violation was overcharging Medicaid programs for services, mostly for drugs. The violations that netted the biggest penalties were for improper promotion of drugs, the study found.

Although fines and settlements have increased in recent years, few companies are excluded from selling to government health programs such as Medicare and Medicaid, the study found. Criminal prosecutions also have been few.

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog: bluegrasspolitics.bloginky.com

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