A Black Eye for a Big Drugmaker

In the annals of corporate greed and chicanery, it's hard to find a less-flattering, more-damaging disaster than the mess in which Aventis Pharmaceuticals Inc. stood accused of having gouged cancer patients undergoing the rigors of chemotherapy.

The company, now known as Sanofi-Aventis U.S. Inc., tried to extricate itself today by agreeing to pay more than $190 million to resolve allegations that it caused false claims to be filed with Medicare and other federal health programs.

At issue was the true market price of Anzemet, an antiemetic drug used by people undergoing oncology and radiation treatment to prevent nausea and vomiting.

The Justice Department alleged that the company set fraudulently inflated market prices for Anzemet knowing that federal health care programs based its reimbursement rates on those prices. Falsely inflating the market price led the government to reimburse more than it should have done.

"Again, a corporation has been caught fraudulently inflating the cost of a drug used primarily to reduce the side effects of cancer treatments without regard to the increased costs borne by government health care programs or elderly and indigent patients," said U.S. Attorney R. Alexander Acosta of the Southern District of Florida. "Corporations cannot continue to mislead the government into paying vastly exaggerated prices by exploiting a health care system based on trust and fair play."

Sanofi Aventis said the acts in question occurred between September 1, 1997, and June 30, 2004—before Sanofi merged with Aventis. "The group has decided to resolve this legacy matter through this settlement, without admitting any wrongdoing." the company said in a statement.

Of the more than $190 million settlement, the federal recovery is $179,787,726, and the states' and District of Columbia's recovery for their share of Medicaid is $10,645,600.

About $32 million will also go to Ven-A-Care of the Florida Keys Inc., a privately owned company that administers chemotherapy drugs to cancer patients in their homes.

Ven-A-Care kicked off the investigation by filing a private whistleblower lawsuit against Aventis, accusing it of encouraging others to file fraudulent claims with Medicare and state health-care programs.

Such lawsuits are encouraged under the False Claims Act. It allows private citizens to file a whistleblower suit on behalf of the government. If the government joins the process and successfully resolves its claims, the whistleblower may receive a share of the recovery.

by Mark Stein