DOJ Recovers Billions in Fraudulent Health Care Charges

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Whistleblowers are helping the Department of Justice expand its pursuit of false claims and police the pharmaceutical industry.

This article published with permission from The Burrill Report.

Here’s a dubious recognition the pharmaceutical industry could have done without: It was the number one source of payments made to resolve state and federal legal claims this year, according to the U.S. Department of Justice.

DOJ enforcement actions recovered nearly $2.2 billion from the industry, including $1.76 billion in federal recoveries and $421 million in state Medicaid recoveries during fiscal 2011, which ended September 30.

Altogether, eight drug manufacturers, including EMD Serono and Novo Nordisk, paid $900 million to resolve allegations that they had engaged in unlawful pricing to increase their profits, according to the agency.

Additionally, GlaxoSmithKline paid $750 million to resolve criminal and civil allegations that the company knowingly submitted, or caused to be submitted, false claims to government health care programs for adulterated drugs and for drugs that failed to conform with the strength, purity or quality specified by the U.S. Food and Drug Administration.

Fraud against federal health programs, primarily Medicare and Medicaid, accounted for $2.4 billion of the more than $3 billion in settlements and judgments in civil cases involving fraud against the government.

West attributed the agency’s success in part to the passage of the Affordable Care Act in 2010, which amended the False Claims Act to provide new incentives for whistle blowers to report fraud and strengthened the provisions of the federal health care Anti-Kickback Statute.

“We are tremendously grateful to whistleblowers who have brought fraud allegations to the government’s attention and assisted us in this public-private partnership to fight fraud,” says Assistant Attorney General Tony West.