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NEW YORK (CNN/Money) -
State and federal prosecutors are investigating 150 cases of alleged pricing fraud by some of the world's largest drug makers, according to a published report.
The Wall Street Journal reported Monday that the investigations could produce more than $1 billion in criminal and civil penalties this year. The paper said the probes are looking at allegations that drug companies cheat state and federal health-care programs by inflating prices and offer undisclosed rebates to distributors. They are also looking into charges the drugmakers market drugs for unapproved uses.
The paper said that earlier probes have already produced fines of nearly $1.5 billion against five of the world's largest drugmakers. The current investigations could hit Swiss biotech Serono Inc. (Research), U.S. drugmaker Abbott Laboratories Inc. (Research) and generic and name-brand drugmaker King Pharmaceuticals Inc. (Research)
All three companies told the paper they are cooperating with the investigations. King has set aside $130 million for possible civil penalties and fines, according to a report, and a King spokesman told the Journal the company hopes to strike a "comprehensive settlement" soon with the Justice Department and other regulators to resolve all pricing claims.
The investigations come months before a new Medicare prescription drug program will dramatically escalate government spending on drugs. The program will cost an estimated $720 billion in its first 10 years. Those costs have prompted Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, to press the Justice Department to step up fraud enforcement, according to the report.
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