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Pharmaceutical Fraud

Fraud in the pharmaceutical industry has been widely covered by the media.  In recent years, dozens of major drug companies have paid hundreds of millions of dollars to settle fraud cases under the False Claims Act.  According to the Taxpayer Against Fraud Foundation, there are over 180 pharmaceutical fraud cases, covering more than 500 drugs, that are now under investigation by the U.S. Department of Justice.   Settlement of just 16 drug manufacturing cases returned over $4 billion to the U.S. Government and the 50 states in FY 2011. 

Pharmaceutical fraud can take a variety of forms, the two most prevalent schemes, however, involve illegal marketing practices and overcharging the government drug prices that are higher than allowable by law.  In December 2010, several drug companies, including Abbott Laboratories Inc. paid $421 million to the government for knowingly reporting false and inflated prices for numerous pharmaceutical products.  In the same month, Elan Corp. and Elsai Company paid $214.5 million to settle charges that it marketed the anti-seizure drug Zonegran for uses other than those approved by the Food and Drug Administration.

Unsafe manufacturing practices also accounts for some of the pharmaceutical fraud cases brought under the FCA.  In October 2010, the government made its largest recovery so far under the FCA when GlaxoSmithKline and its Puerto Rico-based subsidiary paid $750 million to settle civil and criminal allegations that it manufactured and sold contaminated drugs.  The case was brought by a former Glaxo quality control manager who was terminated after she reported the manufacturing problems to management.  The whistleblower, Cheryl Eckard, would collect at least $96 million for her role in helping the government secure a criminal guilty plea and fines.

In addition, kickback schemes such as providing financial or other benefits, like expense-paid consulting trips for doctors and providers, research grants to medical institutions, universities or doctors, or any type of rebate program in exchange for drug utilization, are considered illegal and subject to prosecution.

The funds recovered by the government through settlements and fines are usually returned to the programs involved in the actions.   

 

If you have specific information related to the above-mentioned wrongdoings or similar fraud, contact us and we will analyze your case and provide step-by-step assistance with filing a whistleblower claim to stop the fraud.

Learn more on how to file a whistleblower suit.

 


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