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Date: Fri, 30 Jul 1999 18:48:51 EDT
Subject: Feds Probe Indian Pharmaceutical Co.
Feds Probe Indian Pharmaceutical Co.
.c The Associated Press
By BRIGITTE GREENBERG
NEW HAVEN, Conn. (AP) - The U.S. Department of Veterans Affairs is
investigating whether an Indian tribe's multimillion-dollar pharmaceutical
company illegally resold prescription drugs it bought at a deep discount
from the government.
George T. Patterson, the executive director of the VA's National
Acquisition Center, said Friday the Mashantucket Pequot tribe can only sell
drugs it bought at the discount rate to Indians.
``If, in fact, they are doing otherwise, they're going to be asked to
stop,'' Patterson said. ``If they don't stop, then we would have to pursue
some sort of corrective action.''
He noted, however, that there is no proof that tribe is taking unfair
advantage of its federal discounts. The tribe denies wrongdoing.
``We may want to go in there and take a look just to assure people
everything is kosher,'' he said.
Drug manufacturers have different price schedules for different customers.
For example, hospitals typically get a lower price than drug store chains.
As the biggest buyer of pharmaceuticals in the world, the federal
government gets the lowest price of all.
That discount is passed on to tribes, as required by the Indian
Self-Determination and Education Assistance Act of 1975.
The Pequot Pharmaceutical Network started 10 years ago as a small health
service for members of the tribe and their employees. Today it is a $15
million business that handles 250,000 prescriptions a year. About 70
percent of the business is in mail-order prescriptions shipped from the
reservation.
Tribal spokesman Arthur Henick said the company has a separate inventory
for non-Indian patients and pays a higher rate - similar to that paid by
HMOs - for those medicines.
``We operate under federal guidelines,'' he said. ``Those pharmaceuticals
are basically purchased at a competitive rate.''
The pharmaceutical company is a sideline business to the tribe's main
source of revenue - the Foxwoods Resort Casino, which generates upwards of
$1 million a day.
Questions about the drug company arose when a Washington, D.C., law firm
representing drug makers wrote Patterson last month, expressing concern
about a proposed contract between the state of Connecticut and the tribe to
cover 85,000 elderly and disabled Medicaid patients.
AP-NY-07-30-99 1848EDT
Copyright 1999 The Associated Press. The information contained in the
AP news report may not be published, broadcast, rewritten or otherwise
distributed without prior written authority of The Associated Press.
Reprinted under the Fair Use http://www4.law.cornell.edu/uscode/17/107.html
doctrine of international copyright law.
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