Consumer Fraud

Whistleblowers to get cut of record fines in health care fraud case

osha whistle Whistleblowers to get cut of record fines in health care fraud caseDrugmaker GlaxoSmithKline will pay a combined total of $3 billion in civil and criminal fines and plead guilty to pushing two of its popular drugs for unapproved purposes and withholding important safety information about a third drug from U.S. regulators. A group of whistleblowers instrumental to the case, which is considered to be the largest health care fraud settlement in U.S. history, will receive a percentage of the fines for their role in aiding the federal government’s investigation and helping to recover taxpayer money.

At the center of the case was GSK’s illegal marketing of the drug Paxil to treat depression in children, although it was not approved by the U.S. Food and Drug Administration for anyone younger than 18. The London, England-based multinational drug giant also promoted Wellbutrin for several unapproved treatments, including sexual dysfunction, weight loss, attention deficit hyperactivity disorder, and substance addiction when the drug was only FDA-approved for treating depression.

GSK’s off-label marketing of Paxil and Wellbutrin were not isolated or rare events. Drug representatives nationwide aggressively pitched the drugs for unapproved purposes throughout the medical community for several years, rewarding physicians with luxury spa vacations, lucrative speaking engagements, concert tickets, and other incentives.

Additionally, U.S. prosecutors said that from 2001 to 2007, GSK illegally withheld safety data from clinical trials and studies of its diabetes drug Avandia, particularly concerning the drug’s cardiovascular risks. The FDA required Avandia labeling to warn of increased risk of congestive heart failure and cardiac arrest starting in 2007.

According to Reuters, “Part of the civil fines address allegations that, from 1994 to 2003, GSK underpaid money owed to Medicaid … The company had an obligation to tell the government its ‘best prices’ but failed to do so.” As a result, $300 million of the settlement will be returned to states and other public health agencies that overpaid for GSK-brand drugs.

The whistleblowers who helped the federal government recover its funds will receive a percentage of the $2 billion in civil fines paid by GSK. The amount has not been determined but it may likely be one of the biggest rewards given to whistleblowers.

In 2010, a whistleblower was awarded $96 million for her role for exposing serious contamination problems at a GSK plant in Puerto Rico. In that case, thought to be the largest amount ever rewarded to a U.S. whistleblower, GSK paid the federal government $750 million to settle criminal and civil charges that it knowingly made and sold tainted drugs.

Whistleblowers have become one of the federal government’s most valuable tools in its ongoing efforts to crack down on corporate wrongdoing and recover money lost to overbilling and other fraudulent activities.

Health care is one industry that is particularly rampant with financial fraud, and it’s fallen at the center of recent bipartisan efforts in Washington to fight back. A congressional coalition beefed up the False Claims Act in 2009, making it easier for the government to use the law.

In 1863, Congress enacted the False Claims Act (also called the “Lincoln Law”) to hold individuals and companies responsible when they defraud governmental programs. The FCA includes what is called “qui tam,” shorthand for a Latin term, a provision that allows a person not affiliated with the government to file claims on behalf of the government. This has come to be known as “whistleblowing,” because the person is drawing attention to fraud, or “blowing the whistle” on foul play.

The “qui tam” provision of the False Claims Act allows citizens to sue on behalf of the government and be paid a percentage of the recovery. It is taken from the Latin phrase “qui tam pro domino rege quan pro se ipso in hac parte sequitur,” which means “he who brings a case on behalf of our lord the King, as well as for himself.”

Sources:

Reuters
The Guardian