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Plunket or a multi-nat accused of fraud

12 April 2006

Plunket or a multi-nat accused of fraud - who would you call?

The Government needs to explain why a subsidiary of a huge multi-national corporation which appears on the Top 100 list of US Defense Contractors and which paid US$3 million to settle serious fraud allegations as recently as February has been chosen over the trusted New Zealand institution of Plunket to provide telephone advice to parents, Green Party Health Spokesperson Sue Kedgley says.

McKesson Corporation, the parent company of McKesson New Zealand, which was recently awarded the PlunketLine contract, paid the US Government US$3 million in February to settle claims that it defrauded the United States Defense Department by overcharging for pharmaceutical products.

The company was also embroiled in separate fraud allegations several years ago which saw its former Chief Financial Officer indicted on charges of conspiracy and securities fraud.

While McKesson New Zealand is a separately listed company, it has close ties to McKesson Corporation. Two directors of the New Zealand company are Executive Offices of the parent company.

"It defies belief that McKesson has been favoured over the trusted, local and iconic institution of Plunket to provide health and parenting advice to New Zealand parents," Ms Kedgley says.

"Was the Ministry of Health aware when it negotiated its contract with McKesson New Zealand that fraud had been alleged in its parent company's dealings with the US Government, and if so, why was this information not made public?

"It is bad enough that a grass roots New Zealand organisation with a century of experience behind it has been passed over in favour of an international provider, but for that provider to be part of a company with a track record of fraud allegations is extremely concerning.

"The Prime Minister says PlunketLine was not awarded government funding because of high rates of unanswered calls, but the problem only seems to have become so serious since PlunketLine has operated as a subcontractor to Healthline. It should be given a chance to operate on its own, with adequate funding.

"There are also concerns about the fact that McKesson's staff will not be required to have a post-graduate Well Child Health certificate before they can operate the phone service, as PlunketLine staff were, and about the possibility that McKesson's advice, as a pharmaceutical company, will be drug-focussed.

"Given all these concerns, I believe the Government needs to seriously reconsider its decision to pass Plunket over for this service."


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