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Pierce Egerton
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Proposed Tort Reform Law Could Cost NC Taxpayers Millions

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At a time when the North Carolina legislature is making it harder for its citizens to recover from negligent drug companies, word comes that the state is due to share in a $44 million settlement with drug giant, EMD Serono.

All 50 states and the federal government pursued EMD Serono, claiming it paid kickbacks resulting in fraudulent Medicaid claims for the drug Rebif.pharmaceuticals image

There is a lot of talk this year about protecting the taxpayers. That’s what this settlement is all about. Medicaid fraud costs taxpayers millions. And yet, our legislature is considering a bill that would restrict the taxpayers’ ability to redress greedy corporate wrongdoing.

Further details of the settlement and the pending legislation can be found in the following press release from the NC Department of Justice.

Pharmaceutical company EMD Serono will pay $44.3 million to resolve allegations that it paid doctors to prescribe one of the company’s drugs, Attorney General Roy Cooper announced today.

“Cracking down on Medicaid fraud protects patients and keeps taxpayers from footing the bill for unnecessary costs,” Cooper said. “Rooting out waste and abuse also helps check rising medical costs for all consumers.”

North Carolina, 49 other states, the District of Columbia, and the federal government worked together on the case and contend that kickbacks paid by EMD Serono resulted in fraudulent Medicaid claims for the drug Rebif. Rebif is an injectable medication used to treat the relapsing forms of multiple sclerosis (MS), a chronic autoimmune disease that attacks the central nervous system.

The settlement includes $19 million for Medicaid programs nationwide, including nearly $760,000 for North Carolina’s Medicaid program. Medicaid is a federal-state program that provides health insurance for the poor.

This is the sixth Medicaid fraud settlement with drug makers announced by Cooper’s office so far in 2011. The Attorney General’s Medicaid Investigations Unit (MIU) has recovered more than $400 million for North Carolina over the past decade, including numerous pharmaceutical settlements.

However, legislative action threatens to put those recoveries for taxpayers at risk. House Bill 542, currently pending in the General Assembly, could prohibit similar cases against drug companies in the future. If the bill becomes law, North Carolina could become only the second state in the country that protects pharmaceutical manufacturers from legal claims over wrongdoing as long as the drug has basic approval by the U.S. Food and Drug Administration (FDA).

“It makes no sense to tie our investigators’ hands at this time of growing health care costs and shrinking state budgets,” Cooper said.

In the case against EMD Serono, investigators determined that from March 2002 through December 2009 the company paid doctors for activities such as promotional speaking engagements, attending speaker training, advisory and consultant meetings, educational grants, and charitable contributions. The settlement resolves allegations that these payments were made at least in part to get health care professionals to prescribe Rebif, which increased the number of claims for the drug submitted to Medicaid and paid for by taxpayers.

North Carolina and the other states began investigating EMD Serono in 2006 following a whistleblower lawsuit filed in Maryland under the Federal False Claims Act. A team from North Carolina, South Carolina, New York and Texas participated in the investigation and conducted settlement negotiations on behalf of all the states. North Carolina’s settlement was reached by Cooper’s MIU and the state Department of Health and Human Services, Division of Medical Assistance.

2 Comments

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  1. Cilla Mitchell says:
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    Tort Reform is a legal weapon used in Texas against Texans.

    When there are laws on the books preventing the common man from getting accountability, no telling what will happen.

    Providing a link to a video showing how Tort Reform is working in Texas, or not.

    http://www.youtube.com/watch?v=JT7rxa21_Xo

    Or, just Google Cleveland Mark Mitchell, then click on youtube.

    Thank you for your time,

    Cilla Mitchell

    A Texas nurse and vet

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    Cilla, your husband’s story is truly tragic. I’m deeply sorry for your loss.