Abbott Labs cuts prices on many drugs, treatments amid pricing investigation
Abbott Laboratories, one of more than 20 drug companies targeted in a U.S. Justice Department pricing investigation, has lowered prices on dozens of drugs and medical treatments.
Many prices were lowered slightly or remained the same, but other cuts were substantial. For instance, the price of a drug kit used by home health workers to clear clogged intravenous tubes was reduced from $127 to $2.39.
Abbott is the first major drug maker involved in the federal investigation known to have notified the government of price reductions, the Chicago Tribune reported.
A spokeswoman for the North Chicago-based company said the price changes are routine. Abbott would not respond to questions about whether government price investigations were a factor.
“In all of our businesses, Abbott periodically and routinely evaluates pricing based on a number of factors, including competitor pricing, operation costs, etcetera,” spokeswoman Christy Beckmann said.
The Abbott price reductions would save the Illinois Department of Public Aid alone about $2.5 million a year, officials said. In addition, many private insurance plans base payments for prescription drugs on the same price list that Abbott supplies to the government.
A September 2000 report by congressional investigators found Medicare is overcharged by $447 million per year. The report found drug companies report a higher price to the government for reimbursement than they actually charge doctors, allowing doctors to profit by prescribing the drugs.
The Justice Department is investigating whether more than 20 drug companies, including Abbott, inflated prices paid by Medicare and Medicaid.
Abbott has said it also is a target of pricing investigations in five states, including Illinois.
In addition, TAP Pharmaceutical Products Inc., which is 50 percent owned by Abbott, is under a separate federal investigation of its methods used to market Lupron, a leading prostate cancer treatment.
Neither TAP nor Abbott has been charged, but four urologists have pleaded guilty or agreed to plead guilty to charges they gave free samples of the drug to patients, then billed insurance companies for the drug.
Source: Associated Press