23 March 2026 |
In recent years, our eyebrows have risen alongside the increasing pharmaceutical costs, and patients aren’t the only ones to notice. Adventist Health noticed that multiple big-name pharmaceutical companies were setting prices at astronomical rates in safety-net hospitals in low income areas, allegedly overcharging Medicare and Medicaid by hundreds of millions of dollars.
Adventist Health West argued that, the the drug manufacturers allegedly violated the terms under the U.S. Department of Health and Human Services’ 340B Drug Discount Program. The program was designed in 1992 to combat inflated or unattainable pricing by pharmaceutical companies for low-income patients. Therefore, the program offered medications to health care facilities and hospitals in low-income areas under Medicaid and Medicare at a discount
In 2021, Adventist Health West filed a qui tam lawsuit in Los Angeles federal court against “a collection of pharmaceutical maker defendants, including Abbvie, Allergan, Astrazeneca, Novartis, Sandoz Group, Genzyme and Sanofi, and related companies.” A qui tam lawsuit acts as a whistleblower on behalf of the federal and state government.
The complaint stated:
The overcharges were passed through to government programs in three ways. First, when covered entities purchased drugs at inflated prices, federal and state Medicaid programs reimbursed those higher costs. Second, “critical access hospitals” billed Medicare at 101% of their drug costs, meaning...
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