Doc Indicted for Prescribing Bayer's Cheap Canadian Mirena Instead of Expensive U.S. Mirena

(MoneyWatch)  An Arkansas doctor has been indicted for prescribing a Bayer IUD obtained from a Canadian pharmacy instead of the more expensive version available in the U.S. Dr. Kelly Dean Shrum, 41, was charged with one count of misbranding in violation of the Food, Drug, & Cosmetic Act, one count of fraud, and three counts of money laundering.

The prosecution highlights how the U.S.'s private healthcare system is riddled with higher costs that have been swept away by countries with modern, public systems where governments can negotiate drug prices.

Shrum's lawyers have hit back at prosecutors for what they call "pursuing the best interests of a private corporation to the detriment of American citizens."

The controversy is over Shrum's prescriptions for Bayer's Mirena, a hormonal contraceptive IUD. Shrum found Mirena for sale in Canada at cheaper prices but billed Medicaid at the higher, U.S. rate. Because the Canadian version was not approved by the U.S. FDA, the device was "misbranded." Shrum's lawyers said:

"The United States subsidiary of Bayer has a monopoly on the device sold in the United States and charges American citizens roughly twice what is charged in other countries for the same product."

The lawyers said they believed this was not an uncommon practice among doctors, and added:

"Although the government's press release insists that the regulatory process exists solely to protect the public, in this instance there is no threat to public safety, and the only conceivable harm is to Bayer's profits."

BNET's take: It appears that the "misbranding" charge may be a mere negotiating ploy on behalf of prosecutors. There's no serious belief that Bayer's Canadian Mirena is any different from its U.S. Mirena, surely? However, if Shrum bought the product cheap and then overbilled Medicaid at the U.S. rate -- then that's fraud. Note how the price discrepancy -- and the U.S.'s insane Third World-style private healthcare system -- creates corrupt billing incentives.

• Previously:
• Haemophiliacs Appeal Ruling That Prevents Them Suing Bayer Over HIV-Tainted Blood
• CSPI Sues Bayer Over Alleged Bogus Claim That Vitamins Fight Prostate Cancer
• On Yaz, Bayer Believes "a Multiple of a Rare Event Is Still a Rare Event"
• Bayer Wants Berkeley to Give It a $13M Tax Bailout
• Bayer Says It Settled Decades-Old HIV-Tainted Blood Cases
• Will Roberts Recuse Himself If Bayer Case Reaches Supreme Court?