Whistleblowers' Million-Dollar Reward in Pharmacy Fraud Case

Two elderly Medicare recipients will share almost one million dollars as a reward for bringing a False Claims Act case against RxAmerica, a subsidiary of retail pharmacy chain CVS Caremark Corporation. 

The reward is part of a $5.25 million settlement the company will pay to resolve allegations that gave the government false prices for the Medicare Prescription Drug Program, known as Medicare Part D.

Part D of Medicare provides prescription drug coverage for individuals who join a Medicare-approved plan.  The approved plans are run by private companies and vary in terms of drugs that they cover, the amount they reimburse for those drugs, and the deductibles and co-pays participants must pay.

To assist Medicare beneficiaries when choosing a Part D plan, the Centers for Medicare & Medicaid Services (CMS) offered a web-based tool called Plan Finder.  The Plan Finder allowed Medicare beneficiaries to see estimated prescription drug prices under different Part D plans.  CMS obtained the pricing information from the private companies such as RxAmerica that offered Part D plans.

Max and Jan Hauser enrolled in RxAmerica’s Medicare Part D plan after using the Plan Finder.  The actual drug prices, however, were higher than the prices that had been shown by RxAmerica on the Plan Finder.  This meant that the Hausers' Part D benefits were consumed quicker, and Mr. Hauser was forced into the Medicare Part D "donut hole."  When thrown into the Medicare Part D donut hole, seniors are forced to pay for their prescriptions out of pocket.

After reviewing their Explanation of Benefits form, the Hausers realized that RxAmerica was charging higher prices for the prescription drugs than the prices that were listed on the Plan Finder tool.

They decided to do something about it.  After consulting a lawyer, they filed a qui tam lawsuit under the False Claims Act.  Under this law, individual citizens with evidence of false claims may bring an action on behalf of the government.  As a reward, the individuals who bring the lawsuit are entitled to a percentage of the money recovered by the government, usually between 15% and 30% of the total recovery.

In this case, the government decided to take over prosecution of the case because, in addition to giving false information to individuals, the false information was also given to Medicare.  After the government became involved, RxAmerica agreed to settle the case for $5.25 million.  Almost $1 million of that amount will be paid to the whistleblowers who brought the case in the first place.

If you have information that a pharmacy or pharmaceutical company is engaged in deceptive marketing, promoting drugs for off-label uses, or paying kickbacks to health care professionals, then you should consult with an experienced whistleblower lawyer immediately.  To schedule a free and confidential consultation by telephone or in person, call my office today at (917) 652-6504 or click here to communicate with me via email.

John Howley
New York, New York

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