Three Drug Companies Settle Charges of Defrauding Medicare and Medicaid

Abbot Laboratories of North Chicago, IL,, Roxane Laboratories (also known as Boehringer Ingelheim Roxane Inc.) of Columbus, OH, and R. Braun Medical of Bethlehem, PA, have agreed to pay more than $421 million to settle claims of Medicare and Medicaid fraud.

The government alleged that these companies charged one set of prices to doctors and pharmacies but reported another set of inflated figures, known as the Average Wholesale Price, which were used as benchmarks by the government insurers who reimbursed health care providers. The practice was so widespread that its acronym, AWP, was used by industry insiders to mean “Ain’t What’s Paid.”

Abbott Laboratories will pay $126.5 million, Roxane $280 million, and R. Braun Medical $14.7 million. Ven-A-Care of the Florida Keys Inc., a Key West pharmacy that has won more than a dozen other whisteblower suits, notified the government of allegations of AWP by the three drug companies. Ven-A-Care stands to collect $88.4 million.