M e d i c i n e A ve 2 contains significant financial incentives for whistleblowers (in the law, called "relators") to benefit financially by reporting alleged violations. These lawsuits, known as qui tam actions, have added significant risk of litigation instigated by a company's own employees or, in many cases, former employees. The government also began to investigate business practices that were beyond the purview of FDA, such as the relationship between companies and healthcare practitioners, the ways drugs are priced by a manufacturer or distributor, and calculations for rebates to or reimbursements from the government. Heavy fines are not the only costs of such litigation. Criminal charges against individual company officials have been part of the newly aggressive enforcement policy, as have threats of the "corporate death penalty"—suspension or debarment from selling products to the government—a penalty that no medical products company can tolerate, since federal and state governments either purchase directly or reimburse a significant and increasing percentage of expenditures for prescription drugs and medical devices. Medicare and Medicaid Reimbursement A basic concept that needs to be understood in the context of enforcement actions is the reimbursement system for drugs and devices. Data supplied by manufacturers are used by the government and private sector payors to help determine the reimbursement rates for products as well as how much healthcare providers are paid for administering drugs under Medicare and Medicaid. For example, some Medicare payments (such as under Medicare Part B) for drugs to be administered by a physician or other healthcare professional are calculated by comparison to the average wholesale price for the 44
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