This violation occurs when a company or individual inflates a drug’s average wholesale price (AWP) above its actual market value (actual price) and then seeks Medicare or Medicaid payment, resulting in higher profit margins for pharmaceutical companies and higher costs for government agencies. These types of fraud can go undetected for long periods of time and can place a significant burden on taxpayers, resulting in undermining federal government funds.
Because Medicare and Medicaid are federal programs, charges of AWP inflation can carry severe penalties. Judges and juries in such cases will try to determine whether there was willful conduct, which can result in increased penalties and damages. Often times, Medicare Fraud Charges, Medicaid Fraud Charges and/or private Insurance Fraud Charges can accompany allegations of AWP Inflation.