Lawyers in our firm continue to investigate qui tam lawsuits brought under the False Claims Act, 31 U.S.C. § 3729 et seq. Qui tam suits, commonly called “whistleblower suits,” are actions brought by private citizens on behalf of the United States to recover monies owed to the government. The law provides citizen-Plaintiffs, called “relators,” with powerful incentives – sometimes up to 30% of the amount recovered – to report instances of fraud against the federal government. The relator must have first-hand knowledge of the alleged fraudulent activity. There are safeguards in place so that only claims with merit survive in the judicial system.
The medical and pharmaceutical fields continue to be fertile ground for whistleblower suits. For example, in January 60 Minutes profiled Cheryl Eckard, the relator in a whistleblower suit against pharmaceutical giant GlaxoSmithKline. Ms. Eckard filed suit alleging that GlaxoSmithKline submitted false claims to government health programs to cover up instances of product contamination and mix-up at its Cidra, Puerto Rico, facility. Of course, it goes without saying that production line contamination and mix-ups of powerful medications can be devastating to consumers.
We should be able to take medications prescribed by our doctors without fear that the drugs have been contaminated or mixed up with other products. What is even worse is the GlaxoSmithKline was found to have attempted a cover-up of the problem! GlaxoSmithKline pleaded guilty to a felony and admitted that it distributed adulterated drugs. Consistent with the statutorily-proscribed practice of rewarding the relator for “blowing the whistle” on the fraudulent activity, Ms. Eckard received a portion of the $750 million settlement!
Also, you will recall from our last issue that seven hospitals have agreed to pay $6.3 million for overcharging Medicare for a type of back surgery known as “Kyphonplasty.” This is in addition to previous settlements of 25 hospitals and Medtronic Spine, LLC (formerly known as Kyphon, Inc.) totalling $101 million. Fraudulent overbilling of already cash-strapped state and federal health programs is a common target of qui tam suits, and rightly so – our government has a hard enough time making ends meet without being subjected to theft by those looking to take advantage of public programs meant to ensure health care for those who can least afford it.
We predict that settlements like these in false claims lawsuits will create a powerful incentive for more whistleblowers to come forward in 2011. For more information on qui tam suits, contact Archie Grubb, a lawyer in our Consumer Fraud Section at 800-898-2034 or Archie.Grubb@beasleyallen.com.
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