This makes it hard for Medicare and Medicaid to know how much to reimburse. It's in the drug company's and the pharmacy's best interest that what Medicare pays is as high as possible, since the difference between acquisition cost and reimbursement is profit in the pocket of the pharmacy. It also benefits drug companies since that profit incentivized use and what do they care? It's not their money.
What the gov't does is require every drug company to report various prices. What is the average price the drug is sold at (inclusive of all discount/rebates)? What's the lowest price the drug is sold at? The gov't then uses this information to determine how much to reimburse.
Some of these companies simply reported the wrong prices to the gov't that resulted in inflated reimbursement. That violation falls under the False Claim Act (from the US Civil War) and the companies get sued for every pill they sold at that wrong price. So it adds up.
They should instead lose all profits, and the C-grades lose all that years compensation and be barred temporarily from starting any new companies.
Only if misdeeds jeopardise their other profits will they take notice, otherwise it's always worth trying the fraud because they can do some business without fraudulently presenting prices and so maintain the business.
These sorts of deleterious actions should lead to punishment that risks putting the company in to receivership.
Interesting, when Pfizer was found to be promoting off-label use of their drug (another no-no), they were disbarred. Well... their Pharmacia-Upjohn subsidiary was disbarred. Luckily that entity doesn't actually have any sales.
So the people on Medicare/Medicaid who may benefit from the drug are punished?
How do you punish a misbehaving company without hurting the people using their products?
Is this a sign of wrongdoing? I don't know how things are supposed to work.