Major pharmaceutical caught purposely wasting their own medication

Major pharmaceutical caught purposely wasting their own medication

The company was accused of intentionally wasting medicine to collect extra payments from the government.

DaVita Healthcare Partners, Inc, a company that provides kidney dialysis medication and treatment, will pay over $400 million to settle a lawsuit alleging that it defrauded Medicare. The settlement was announced on April 16, but the amount that DaVita was required to pay was not revealed until Tuesday.

The suit was initiated by two whistleblowers from Georgia: nephrologist Alon Vainer and nurse Daniel Barbir. They alleged that DaVita intentionally wasted medicine by packaging it in too-large vials and spreading treatments over an unnecessarily long period of time. Davita then charged Medicare for the extra medicine, saying that the waste was unavoidable.

The plaintiffs believe that this settlement may be the largest for a whistleblower lawsuit that lacked government assistance. The U.S. department of Justice examined the lawsuit but decided not to join it in 2011, indicating its lack of confidence in the strength of the case.

DaVita’s Chief Legal Officer, Kim Rivera, said that while DaVita was confident it had a strong case, the punishment for being found the wrong was severe enough that it made more sense for the company to settle. The amount of the settlement was made public when DaVita posted a first-quarter loss of $110 million, which reflected a $298 million settlement payment.

DaVita’s largest shareholder is Warren Buffett’s Berkshire Hathaway investment company. Berkshire owns approximately 18 percent of DaVita. The news of the settlement caused DaVita’s stock price to fall 6 cents on the New York Stock Exchange.

 

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