Last week the U.S. Department of Justice issued a compilation of False Claims Act recovery information showing that it had obtained more than $3 billion in settlements and judgments during the course of fiscal year 2019 (October 2, 2018 – September 20, 2019). The bulk of recoveries once again arose in the health care industry—a whopping $2.6 billion.

Settlements and judgments in the health care realm included drug and medical device manufacturers, managed care providers, pharmacies, hospitals, hospice organizations, labs, and physicians accused or found guilty of having bilked federal programs like Medicare, Medicaid and TRICARE.

Notable recoveries in the health care realm included:

  • Insys Therapeutics – $195 million to settle allegations that the company had paid kickbacks to physicians and nurse practitioners in exchange for prescribing Subsys to patients. Kickbacks included lavish meals and entertainment, jobs handed out to prescriber friends and relatives, and sham speaker events.
  • Reckitt Benckiser Group PLC – $500 million to the U.S. government (out of a total $1.4 billion to resolve criminal and civil liabilities) for activities related to its marketing of the drug Suboxone. The company allegedly promoted the drug to physicians and encouraged the writing of prescriptions for the drug that were unsafe, ineffective, and medically unnecessary, as well as performing actions to delay the entry of generics in order to positively impact the pricing of Suboxone.
  • Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined $624 million following allegations that the companies had paid patient copays for their own drugs via false “independent foundations.” 

In a statement accompanying the report, DOJ also pointed out that it held individuals, and not just companies, to account for FCA violations during FY2019. As examples, the statement cited Osteo Relief Institutes, whose owners settled allegations of bilking Medicare for medically unnecessary arthritis-treatment injections and knee braces for over $7.1 million. Also highlighted was $250,000 collected from the majority owner and CEO, respectively, of Vanguard Healthcare LLC for the submission of false claims to Medicare and Medicaid for nursing home services that were “grossly substandard or worthless.” Also of note was over $300,000 in settlements paid by the CEO and former VP of Operations of the compounding pharmacy Diabetic Care Rx LLC (aka “Patient Care America”) to resolve allegations that they, together with a private equity firm, had submitted false claims to TRICARE.

Finally, the role of whistleblowers in the recovery of federal funds via the FCA was highlighted, with the numbers indicating that over $2.1 billion of the $3 billion recovered in 2019 arose through lawsuits filed under the qui tam provisions of the FCA. On average, more than 12 new cases were filed each week, with a total of 633 filed during the course of the fiscal year. Whistleblowers were paid over $265 million from the FCA recoveries for their roles in exposing the fraud.

The FisherBroyles Pharmacy and Health Care Law team is pleased to keep you updated on events of interest to those in the healthcare and pharmaceutical industries. Questions regarding the subject matter of this alert may be directed to any of the following attorneys:

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid

Amy Butler, FisherBroyles Partner
Amy Butler