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Merck Reaches Fraud Settlements

Pharmaceutical company Merck & Co. has agreed to pay more than $650 million to federal and state governments to resolve claims that the company provided kickbacks to physicians to purchase Merck products and failed to pay proper rebates to Medicaid. The company did not admit wrongdoing as part of the settlement. “Merck believes its pricing and sales and marketing policies and practices were consistent with all applicable regulations and contracts during the relevant time,” the company said in a statement. In a lawsuit filed in Philadelphia, a former Merck employee alleged that from 1997 to 2001 Merck sales representatives made illegal payments to physicians to purchase its drugs and disguised those payments as fees for training or funding for market research. In addition, the suit against Merck alleged that the company offered hospitals substantial discounts for purchasing Zocor (simvastatin) and Vioxx (rofecoxib) if they used those drugs primarily over other competing brands. Merck is alleged to have excluded those discounts when reporting price information to Medicaid, which is entitled to receive the “best price” under the law. In a separate lawsuit against Merck, a physician in New Orleans alleged a similar scheme in which the company would offer substantially lower prices on its Pepcid (famotidine) products once a hospital agreed to use the drug primarily over a competitor's product. Once again, Merck is alleged to have excluded those discounts in its reporting to Medicaid. Under the terms of the two settlements, Merck has agreed to pay more than $360 million to the federal government and more than $290 million to 49 states and the District of Columbia. The company also has also entered into a 5-year Corporate Integrity Agreement with the Health and Human Services Department Office of Inspector General.

M.D. Faces Plagiarism Charges

Dr. Lee S. Simon, a rheumatologist and associate clinical professor of medicine at Harvard Medical School, Boston, is under a cloud of suspicion after a computer program found significant similarities between an article he authored that was published in 2004 and an article by another author that was published a year earlier. An internal ad hoc committee at Harvard is conducting a preliminary review of the situation, according to a spokesman for the university. A computer program called eTBLAST, which was developed by researchers at the University of Texas Southwestern Medical Center at Dallas, identified duplications between Dr. Simon's article on the treatment of rheumatoid arthritis in Best Practice & Research Clinical Rheumatology in 2004 and a 2003 article published in the journal Expert Opinion on Drug Safety. Elsevier, which publishes Best Practice & Research Clinical Rheumatology and this publication, retracted Dr. Simon's article in January, saying that it “included the reproduction of several sections of text and much of the reference list” from the other paper. Dr. Simon had no comment on the accusation as of press time.

Individual Mandates Necessary

Unless the United States adopts a single-payer health system, it will not be possible to achieve universal coverage without a mandate that requires individuals to purchase health insurance, a new report from the Urban Institute concluded. A system that encouraged but did not require people to get health insurance would tend to enroll disproportionate numbers of individuals with higher-cost health problems, the report said. This could create high premiums and instability in the insurance pools that enroll those individuals, the report said. In addition, the government would have difficulty redirecting current spending on the uninsured to offset some of the cost associated with a new program without universal coverage, according to the report, “Do Individual Mandates Matter?”

Part D Costs Drop

The projected cost of providing Medicare beneficiaries with a prescription drug benefit through private health plans has dropped again, according to the Centers for Medicare and Medicaid Services. The CMS said in its fiscal year 2009 budget documents that the overall projected cost of the Part D drug benefit will be $117 billion lower over the next 10 years than it had estimated last summer. The difference between the two projected costs results from the slowing of drug cost trends, lower estimates of plan spending, and higher expected rebates from drug manufacturers, the CMS said. Compared with original projections, the anticipated net Medicare cost of the drug benefit will be $243.7 billion lower over the 10 years ending in 2013.

Programs Cut Smoking Rates

State tobacco control programs are effective at cutting adult smoking rates, according to a study by researchers at the Centers for Disease Control and Prevention and RTI International. The researchers were able to quantify the link between comprehensive tobacco control programs and a decrease in adult smoking, observing a decline in prevalence from more than 29% in 1985 to less than 19% in 2003. Among individual states, declines in adult smoking prevalence were directly related to increases in state per-person investments in tobacco control programs, the researchers wrote. Such programs use educational, clinical, regulatory, economic, and social strategies to establish smoke-free policies and social norms, to help tobacco users to quit, and to prevent people from starting to smoke. The study was published in the February issue of American Journal of Public Health.

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