Pharmaceutical News
NHI fraud: A local drug company stole NT$70 M from the system

The TaiChung City Investigation Office collaborated with the NHIA to crack down on drug price fraud.  After six months of investigation, one drug company was found colluding with 449 healthcare providers to boost the market share of 5 products by offering huge discounts and free goods.  The company then applied for NHI listing with data of inflated drug prices to profit from the price gap.  The investigators estimated that the company stole over NT$70 million in the past two years. 

Chang Ying-Jen, Vice Director of the TaiChung City Investigation Office, expressed that by law the NHIA has to review drug payment prices once every two years.  This company found a loop hole in this system and applied the so-called vulture tactic in the stock market to profit from the NHI.  The company colluded with 449 healthcare providers to boost the sales volume by providing 85% discount.  In one case, a clinic received 57300 tablets for free for an order of 14700 tablets.  

After the products secured a certain market share, the company then applied to the NHIA for NHI listing.  The NHIA priced the drug based on the inflated market prices.  The result is that the NHI payment prices are five times higher than the actual prices.  In the past two years, the company made a profit of NT$70 million from the NHI system. 

The Investigation Office expressed that this fraud involves medical centers, health clinics and pharmacies, all in central Taiwan.   The investigators and the prosecutors interviewed 4 people from the company and will launch a full investigation.

【2014-05-23/ BCC News】