Healthcare has been a focus of the 2008 presidential campaign, and Senator Barack Obama (D-IL) has often mentioned the need to reduce healthcare costs. He has proposed measures such as investing in health information technology, prevention, and care coordination to ease the financial burden on families. But the government should also use its influence to ensure that Medicaid and Medicare pay reasonable, or discounted, prices for drugs. A recently concluded lawsuit in Missouri demonstrates the need for oversight.

The state’s attorney general charged that Warrick Pharmaceuticals, a division of Schering-Plough (Kenilworth, NJ), sold drugs to pharmacies participating in the Missouri Medicaid program, then reported selling the products at higher prices. The reports of inflated prices cost Missouri taxpayers millions of dollars, according to the attorney general. A jury found that Schering-Plough owed the state $7.3 million in compensatory damages. The company will pay $31 million to resolve Missouri’s claims.

If the next president is serious about reducing healthcare costs, one of his strategies should be to keep close tabs on the prices Medicare and Medicaid pay for therapies. The government should ensure that it is not shouldering an undue burden to enrich companies that engage in unscrupulous behavior.