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State drug fraud cases on the rise, study says

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Federal and state prosecutors have collected more than $30 billion from drug companies for alleged fraud and illegal marketing over the last 20 years, according to a new report by consumer advocacy group Public Citizen.

The report shows that state attorneys are increasingly following the lead of federal prosecutors in seeking multimillion-dollar settlements with drugmakers such as GlaxoSmithKline and Eli Lilly and Co. Analysis by Public Citizen found that state governments have collected $3.7 billion from drugmakers since 2009, or roughly six times more money than in the previous 18 years combined.

Overcharging state health plans like Medicaid was the most common allegation, while unapproved drug marketing was the most costly, the group says.

Drug companies are permitted to market drugs only for uses that have been approved by the Food and Drug Administration. In recent years the Department of Justice and state attorneys general have increasingly pursued cases of off-label marketing, or promoting drugs for unapproved uses.

Governments are spending more on prescription drugs as programs like Medicare and Medicaid swell with aging baby boomers. That increased spending has attracted scrutiny from investigators looking to recover taxpayer dollars.

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

State and federal attorneys have collected $6.6 billion through mid-July this year, setting a new record for settlement totals in a single year.

Three drug companies have paid two-thirds of the financial penalties paid out since November 2010: GlaxoSmithKline, Johnson & Johnson and Abbott Laboratories. In July, British drugmaker GlaxoSmithKline agreed to pay $3 billion in fines — the largest health care fraud settlement in U.S. history — for criminal and civil violations involving 10 drugs, including the diabetes pill Avandia.

Indianapolis-based Lilly and Pfizer Inc. have also paid penalties of more than $1 billion in recent years to settle allegations of improper marketing.

The Pharmaceutical Research and Manufacturers of America's Vice President Matt Bennett responded to the report in a statement: "Our member companies devote significant resources to internal compliance programs and thorough investigations of any reported misconduct — activities that complement the government's enforcement efforts."

Health care companies have historically accounted for about 80 percent of settlements under the federal False Claims Act, which allows the government to collect damages reported by private citizens. In many cases, the alleged fraud is reported by company whistleblowers, who are eligible to receive between 15 percent and 30 percent of the total collected by the government. Public Citizen often supports whistleblowers and their attorneys who report fraud to the federal government.

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  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

  4. Marijuana is the safest natural drug grown. Addiction is never physical. Marijuana health benefits are far more reaching then synthesized drugs. Abbott, Lilly, and the thousands of others create poisons and label them as medication. There is no current manufactured drug on the market that does not pose immediate and long term threat to the human anatomy. Certainly the potency of marijuana has increased by hybrids and growing techniques. However, Alcohol has been proven to destroy more families, relationships, cause more deaths and injuries in addition to the damage done to the body. Many confrontations such as domestic violence and other crimes can be attributed to alcohol. The criminal activities and injustices that surround marijuana exists because it is illegal in much of the world. If legalized throughout the world you would see a dramatic decrease in such activities and a savings to many countries for legal prosecutions, incarceration etc in regards to marijuana. It indeed can create wealth for the government by collecting taxes, creating jobs, etc.... I personally do not partake. I do hope it is legalized throughout the world.

  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.

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