A group of Democrats are asking the Obama administration to reconsider its decision to award a $400 million contract to a medical device maker after the manufacturer admitted to billing Medicare for devices that were manufactured overseas but not yet sold in the U.S. The group is calling for an investigation of the process and the process itself.
The NRDC is also demanding the HHS Secretary provide a full accounting of how the decision was made and why it was allowed to stand.
“This award should not have been awarded to a company that has not made meaningful investments in manufacturing in the United States, especially at the expense of Americans,” NRDC Vice President Julie Swail wrote in a letter to the Department of Health and Human Services (HHS).
“These are critical steps for the future of innovation in the medical device industry, and we call on the Department to address the problems identified and to immediately end this award.”
In a statement, a spokesperson for the HHS Department of Labor said the department was “reviewing” the NRDC letter.
The company also acknowledged the payments in a statement to Reuters, saying they were made on the company’s behalf “in order to enable the Company to provide healthcare services in the USA.”
The NRDAC announced in February that it had entered into a $1.2 billion agreement to buy a medical devices manufacturing company that was already based in the Philippines, and had no plans to relocate its headquarters.
The firm said it was hiring an additional 250 workers, and would spend the money on “investments to increase the quality and speed of our supply chain.”
The company said it had signed a contract with the government to supply a total of 7.6 million devices by 2022, up from 5.4 million devices currently sold in U.A.E. The $400,000 contract was the largest contract for medical devices in the country.
A representative for NRDC said the group has been in contact with the company and will “work with them as we move forward with the NRDCA.”
NRDC Chairman Jon Ward said he expects the company to make its response to the NRDDAC letter public at the end of the week.
“As we’ve said from the beginning, this is not the right way to proceed,” Ward said.
“The NRDC strongly disagrees with the HHS’s decision to pay this large contract to an overseas firm that is not a U.L.A.-based company, and believes it will be counterproductive and potentially illegal.”
The deal has sparked outrage in the Latino community, which has called for an end to the practice of medical device manufacturing in U,A.A., and has been calling on the administration to investigate the company.
In a letter sent to the HHS on Friday, the National Association of Latino Elected and Appointed Officials (NALEO) called the NRDAO’s move “unconscionable” and said it “cannot stand by as a private company makes its own decisions in the name of Medicare.”
“The federal government cannot ignore the very serious health problems that these awards are designed to address.
It is imperative that the HHS and the Administration come clean about the decisions made by this firm and its CEO,” the letter said.