The Medicaid programs around the country have had a tough month. All the talk due to Obama’s healthcare plan has put Medicaid’s effect on our economy under a magnifying glass. However, last week the Medicaid programs finally caught a big break:

GlaxcoSmithKline, one of the largest pharmaceutical companies, shelled out $3 Billion in fraud penalties and a large percentage of that pot was sent to Medicaid programs.  In particular, according to Missouri Attorney General Chris Koster, Missouri’s Medicaid program will collect nearly $32 million.

So how did GlaxcoSmithKline manage to get tanked with the largest health care fraud settlement in U.S. history? On July 2^nd the drugmaker pleaded guilty to criminal charges in breaking U.S. marketing laws and developing its pharmaceuticals.

GSK pushed its Paxil antidepressants on children when it was only approved for adults. Furthermore, they wrongfully marketed another antidepressant, Wellbutrin, as a weight-loss drug and a treatment for sexual dysfunction. The drugs were on the market for 5 years before they endured regulatory scrutiny due to a rise in suicides of children prescribed on Paxil.

I don’t want to blame our doctors but, couldn’t this have been avoided sooner? According to a Department of Justice press release, GlaxcoSmithKline has been wining and dining doctors  since the late 1990s, offering them illegal kickbacks of spa treatments and other goodies to promote their drugs.

Agents from the FDA’s Office of Criminal Investigations investigated GlaxcoKlineSmith, and their efforts paid off. In my opinion, much of the credit is due to our old friend, the Whistle-Blowing Act, officially known as the “False Claims Act.”

Whistle-blowers get a share of any money recovered by the federal government in relation to their report. Lois Graydon, a nursing professional and former GSK therapeutic sales manager, will receive more than $700 million as her share of the recovery. Laws such as this are helpful, especially when it comes to healthcare fraud.