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Hospitals, pharmaceutical companies ordered to come clean on drug prices

"We are all victims when there is fraud at the NHI."

Chu Tzer-ming, president and CEO of the National Health Insurance

Hospitals and pharmaceutical companies have been urged to come clean on the prevalent practice of colluding to inflate drug prices that have been submitted to the National Health Insurance (NHI).

At a news conference yesterday, the NHI said it would work with the Tainan District Prosecutors' Office to close the "drug pricing black hole" that was draining the NHI's finances.

"We all benefit from the NHI," said the head of the prosecutors' office, Chu Chao-liang (朱朝亮).

"We are all victims when there is fraud at the NHI," president and CEO of the NHI Chu Tzer-ming (朱澤民) said.

Instructions have been sent to the 528 hospitals and 1,339 pharmaceutical companies within the health system.

"They will need to take a second look at their pharmaceutical claims to the NHI and rectify the records if necessary to account for any irregularities before Jan. 22," said Chu, who only assumed his position three days ago.

Divisional chief prosecutor Tseng Chao-Kai (曾昭愷) said that his office would be "as lenient as possible" to those who turn themselves in.

"Like the investigations into the `special allowance funds,' there will be rivers of blood if everybody is prosecuted," Tseng said. "We're not interested in that. But we are serious about ending this practice, which is bankrupting our NHI."

"We understand that in many cases this is an institutional problem," Chu added. "Both doctors and pharmaceutical companies have told us that the practice of padding drug prices is an open secret with the NHI and a way for hospitals to fund the rest of their medical services. This is an aspect that we're continuing to investigate."
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