Medical ethics

["Michael Keaney" <Michael.Keaney@xxxxxx>]

Probe into fraudulent billing for drugs

Financial Times, Aug 24, 2001
By CHRISTOPHER BOWE

Federal investigators have launched a probe into possible fraudulent
billing practices relating to the
supply of medical and nutritional products to hospitals and nursing
homes, according to companies who
were targeted in the inquiry.

US medical groups Abbott Laboratories, the Kendall unit of Tyco
International and Novartis of
Switzerland told the Financial Times yesterday they were co-operating
with the investigation. Together
with Zevex International, the four companies are at the centre of the
prosecutors' probe of the medical
and nutritional products supply industry.

"We are aware of the investigation. The investigation includes the whole
industry - manufacturers,
distributors, nursing homes and hospitals," said Christy Beckman,
spokeswoman at Abbott
Laboratories.

The investigation, ordered by the US attorney in the Southern District
of Illinois, is understood to be
looking at potential schemes to fraudulently charge Medicare and
Medicaid, federal health programmes
for the elderly and poor, for nutritional products. The probe focuses on
whether products such as
pumps and nutritional supplies to feed elderly or infirm patients were
given away or sold cheaply in a
kickback programme to boost sales.

The alleged scheme would then see hospitals or nursing homes bill the
federal health programmes for
higher prices and a significant profit.

The investigation highlights growing scrutiny by federal prosecutors of
drug and medical products
companies sales practices.

Among them, Abbott is the subject of another inquiry with federal
investigators in Massachussetts, and
Bristol-Myers Squibb and Schering-Plough have confirmed their practices
are being investigated.

The other inquiry for Abbott involves TAP, its joint venture with
Japan's Takeda Chemical Industries.
Four urologists have been charged for taking free samples and then later
billing for full prices of its
successful prostate cancer drug Lupron.

Abbott has not admitted wrongdoing in the case, but has built a reserve
of almost Dollars 400m for its
share in a negotiated settlement with federal investigators.

Full article at:
http://globalarchive.ft.com/globalarchive/articles.html?print=true&id=01
0824001840

Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney@xxxxxx