Big Pharma Accounts for 87% of Healthcare Fraud Settlements

ILLEGAL KICKBACKS, OFF-LABEL MARKETING, AND SUBSTANDARD MANUFACTURING

The federal government recovered more than $4.3 billion from companies and individuals who were accused of healthcare fraud last year.  Of that amount, $3.75 billion – or 87% of the total – was recovered from pharmaceutical companies.

Several pharmaceutical companies paid hundreds of millions of dollars to settle claims that they paid kickbacks to doctors and pharmacists in exchange for prescribing the companies’  drugs.

For example, Amgen paid $762 million to settle claims that it paid kickbacks and engaged in other illegal marketing tactics to promote three of its drugs for off-label uses.  Sanofi paid $109 million to settle allegations that it gave doctors free units of the knee injection drug Hyalagan to persuade them to prescribe more of the drug. 

The Anti-Kickback Statute prohibits paying anything of value in return for patient referrals or prescriptions.  The law is designed to ensure that patients are prescribed drugs based solely on their medical needs, not because the doctor or pharmacist is being paid by the pharmaceutical company to prescribe a particular drug.  In addition, the law seeks to prevent claims for reimbursement from Medicare and Medicaid for prescriptions that are not medically necessary.

Other healthcare frauds by pharmaceutical companies involved the sale of drugs that did not comply with FDA manufacturing standards.

Ranbaxy Laboratories paid $500 million for violating manufacturing standards and attempting to cover up its substandard products by making false statements in its manufacturing reports to the FDA.  According to the government, Ranbaxy made and sold drugs whose potency, purity, or quality were not within FDA requirements.

Other cases against pharmaceutical companies involved off-label marketing of pharmaceuticals for uses not approved by the FDA.  An off-label use is one that is not approved by the FDA.  While a physician may prescribe a drug for an off-label use based on her or his professional judgment, the pharmaceutical companies are not permitted to promote their drugs for any use not approved by the FDA.

Abbott paid $1.5 billion to settle claims that it promoted Depakote, a seizure drug also used to treat bipolar disorder, for off-label uses such as controlling agitation and aggression in elderly dementia patients.

Wyeth Pharmaceuticals, a subsidiary of Pfizer, paid more than $490 million for marketing the kidney transplant drug Rapamune for unapproved uses and for engaging in a campaign to switch patients to Rapamune from other drugs.

Many of the healthcare fraud cases against the pharmaceutical companies were brought by whistleblowers – current or former employees who came forward with evidence of substandard drugs, improper marketing activities, or illegal kickbacks.  Under the False Claims Act, these whistleblowers are entitled to receive large rewards of between 15% and 30% of the amount recovered by the government.

If you have evidence that a pharmaceutical company is engaged in off-label promotion, kickbacks, or other improper or illegal conduct, you should consult with an experienced whistleblower lawyer to protect your rights.  You may be entitled to a large reward and other protections.

To arrange a free and confidential consultation with an experienced whistleblower attorney, call John Howley, Esq. at (212) 601-2728 or click here to reach our office via email.

John Howley, Esq.

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