A NY Criminal Defense Attorney Explains Best Price Rule Fraud
If pharmaceutical companies wish to have their drugs paid for by Medicaid, the companies must enter into an agreement guaranteeing they will provide Medicaid the same rebates and discounts available to those who purchase medications on an open market. The price Medicaid must pay for a particular medication is based on the Average Manufacturers Price (AMP) and the Best Price, both of which pharmaceutical companies most report. In some cases, however, pharmaceutical companies are inaccurate when reporting their best price.
Best price rule fraud can result in criminal consequences, as well as civil action. Pharmaceutical companies, drug company employees, and others involved in submitting information on a drug’s best price can all face legal consequences. Bukh Law Firm, PLLC provides legal representation to any company or individual facing legal consequences as a result of best price rule fraud. We understand complex Medicaid rules and regulations and can provide comprehensive assistance in fighting criminal charges. Call today to schedule a consultation with a NY criminal lawyer to learn more.
What is Best Price Rule Fraud?
The Best Price is the lowest price that any retailer or any other purchaser pays for a drug provided by a manufacturer. The Best Price is calculated after all discounts- including volume and cash discounts- as well as after all rebates, incentives, or free goods are taken into account.
When Medicaid purchases a drug, it is guaranteed a rebate that is equal to the greater of between 13 to 23.1 percent of the Average Manufacturers Price (AMP) or of the difference between the AMP and best price. The specific percentage rebate varies based on the type of drug. The purpose of this rule is to make sure Medicaid does not end up paying more than any other purchaser does when it covers a medication.
Best price rule fraud, however, involves a pharmaceutical company reporting a higher best price to Medicaid than the company should be reporting based on actual charges. If the company offers a lower price to any private purchaser (even taking discounts, rebates, and free items into account), this company may be considered to be committing best price rule fraud.
Penalties for Best Price Rule Fraud
Best price rule fraud has significant consequences. In October of 2014, the New York Attorney General announced that New York and other states settled allegations against a drug manufacturer for misrepresenting drug prices to New York’s Medicaid program. The value of the settlement reached by the drug company was $31 million, of which New York would receive more than $2.48 million in restitution and other recoveries.
This is just one of many examples of a drug company being forced to pay billions of dollars in damages for reporting the wrong price to Medicaid and for failing to provide accurate information about the lowest cost paid for a particular drug.
Drug companies and individuals involved in best price rule fraud schemes can face both civil and criminal actions and both civil and criminal penalties, including all criminal consequences for pharmaceutical fraud. It is imperative an effective legal strategy is developed addressing all potential penalties and consequences.
A New York City Defense Attorney Can Help
Bukh Law Firm, PLLC has the experience and knowledge necessary to defend pharmaceutical and drug companies, as well as to represent individuals who are facing the threat of legal consequences for best price rule fraud. We work hard to resolve cases quickly, protect your finances by minimizing penalties and restitution, and keep all involved parties out of prison. To learn more about the legal services that our defense firm provides or to speak with a NY defense lawyer, give us a call today.