http://www.latimes.com/news/nationworld/nation/wire/sc-dc-1208-drug-promotions-20101207,0,1770487.story WASHINGTON -- Abbott Laboratories and two other pharmaceutical firms agreed to pay more than $421 million to settle claims of defrauding Medicare and Medicaid in the latest in a string of nine- and ten-figure health care fraud settlements announced by the Justice Department.
The drug companies charged one set of prices to doctors and pharmacies but reported another set of inflated figures that were used as benchmarks by government insurers reimbursing health care providers. The spread, or difference, amounted to kickbacks to the companies' customers, according to Tony West, assistant attorney general for the Justice Department's civil division, who announced the settlements on Tuesday.
The practice of inflating the benchmark, known as the Average Wholesale Price, was so widespread, that its acronym, AWP, was said by industry insiders to mean "Ain't What's Paid," West said, adding that "the only purchasers who paid the inflated, reported drug price were you, the American taxpayers."
Since January 2009, healthcare settlements have accounted for more than $5 billion out of $9 billion recovered in fraud cases of all kinds brought by federal prosecutors, West said.