Covidien, a Fortune 500 pharmaceutical and medical device company, settled a whistleblower lawsuit with the U.S. Justice Department claiming the company defrauded Medicare and Medicaid.
According to the the DOJ, Covidien’s payments to pharmacies were “late, inaccurate, or all in one year.” The DOJ also claimed Covidien’s charges for drugs to be dispensed by other pharmacies were “higher than true” and increased the company’s revenues.
Lawsuits filed by the DOJ and shareholders have raised a number of concerns, including the approval process used to submit and fund U.S. medical device approvals.
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Before the merger was approved by shareholders, the board delayed the merger and fired the company’s CEO and CFO.
Covidien also said former Chief Executive Officer Omar Ishrak had purchased $100,000 in stock just days before the merger.
Former Sen. Rick Santorum (R-Pa.) was the guest on “America’s Newsroom” Monday and said under President Trump, the pharmaceutical companies are “scrambling to do things right.”
He said Americans will have to have confidence in the agencies that approve medical devices to prevent “welfare fraud.”
“Anybody out there who’s still on this Oxycontin or any of the people who are still doing it are making money hand over fist,” Santorum said. “As we’ve seen, almost no one goes to jail in this business. It’s greed, it’s incentive. There’s no reason we shouldn’t have confidence in the agencies that approve medical devices because you never know what’s going to get approved and if it’s approved, who knows what’s going to happen to the man or woman who pushed it through.”
Santorum said it’s important for the FDA and other governmental agencies to make sure companies have the right incentives to stop what he called “welfare fraud.”
He noted that Trump’s former chief strategist, Steve Bannon, helped launch the Breitbart News Network, a platform that helped combat the idea that the pharmaceutical industry should be regulated.
On the other hand, Santorum said that in many ways, Medicare and Medicaid are in “turmoil.”
“You know, you look at this [former top Medicare official] Billy Canada here, who worked for 20 years to basically, in essence, bypass agencies like the FDA and really just deal directly with pharmaceutical companies, and the minute they got the president in office, he left,” Santorum said.
He added that the approval process for medical devices has to change so that the FDA ensures that people don’t become dependent on drugs and pharmaceuticals, and “that could make a big difference.”
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