India’s largest generic drug manufacturer, Ranbaxy Laboratories Limited, settled with the United States and states’ attorneys general earlier this month for allegations that Ranbaxy falsified data, violated Current Good Manufacturing and Laboratory Practices, and sold substandard and unapproved drugs. This settlement is due to the efforts of whistleblower Dinesh S. Thakur through a False Claims Act (FCA) lawsuit. It clearly was a whistleblower-inspired settlement.
The case was filed in the U.S. District Court for the district of Maryland and was based on violations of the Federal False Claims Act and a number of state false claims laws. Dinesh Thakur, former Ranbaxy director and global head of research information and portfolio management, will receive $48.6 million as the whistleblower in the case. Thakur, who uncovered the unsafe practices and violations at Ranbaxy, said in a statement:
Ranbaxy’s management was notified of these widespread problems. When they failed to correct the problems, it left me with no choice but to alert healthcare authorities. It took us eight years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs.
The whistleblower learned of Ranbaxy’s fraudulent practices and reported them internally to no avail. Due to Ranbaxy’s lack of action, Thakur left the company and exposed the fraud against the federal government by filing a False Claims Act lawsuit in 2007. It was alleged in the complaint that Ranbaxy caused false claims to be submitted for payment by government health care programs for various drugs that were adulterated and substandard.
The False Claims Act allows whistleblowers to report fraud against the federal government by filing a lawsuit on behalf of the government. Successful whistleblowers will recover a percentage of the overall recovery that the government receives. Typically, a whistleblower recovers between 15-25 percent of the total recovery. In Thakur’s case, he will receive 21 percent of the $350 million awarded in civil damages. An additional $150 million in criminal penalties were assessed against Ranbaxy.
Almost 80 percent of all generic drugs in the United States are manufactured overseas. Whistleblowers like Thakur can save the taxpayer millions of dollars by stepping forward and filing a False Claims Act lawsuit. The impact of whistleblowers is tremendous and results in hundreds of millions of dollars recovered for the government each year. In a time when the United States faces a budget crisis, whistleblowers are quickly becoming a much-needed asset in recovering government funds that have been fraudulently used. Additionally, states such as Alabama are benefiting from Thakur’s whistleblowing. In Alabama’s case, the state is benefiting to the tune of $6.9 million, all because of Thakur taking a stand.
Many states have adopted state versions of the False Claims Act. In order to qualify as a whistleblower under the False Claims Act, a person must have direct knowledge of a false claim being submitted to the federal or state government for payment. Most fraudulent schemes are very complex and only insiders know the intricate details of the fraud. However, it is not a requirement that the whistleblower be an employee of the company defrauding the government, so long as the whistleblower has direct knowledge of the fraud committed.
False Claims Act cases are filed for a variety of fraudulent schemes against the government. The health care industry, specifically Medicare and Medicaid, are commonly defrauded and ripe for a False Claims Act lawsuit. Additionally, government contractors, especially defense contractors, have defrauded the federal government for the past 10 years as the War on Terror continues. Anyone considering filing a False Claims Act lawsuit should know that their suit will be under seal for potentially several months or even years until the government decides whether it wants to intervene in the case. Also, the False Claims Act forbids employers from retaliating, harassing or threatening employees for reporting fraud to the government. Finally, the possibility of earning 15-25 percent of the government’s recovery is a positive incentive for whistleblowers to step forward and tell the truth. It is in the taxpayer’s interest that whistleblowers speak out against fraud being committed on the government.
It should also be noted that Alabama will receive $6.8 million from the settlement, which will go to the state’s ailing Medicaid program. As stated above, false and fraudulent claims were submitted to the State Medicaid Programs, including the Alabama Medicaid Agency, by Ranbaxy. It’s rather interesting, to say the least, that corporate fraud in the Medicaid program exists in the rest of the U.S. Ironically, Alabama is getting money in this settlement based on fraudulent conduct that the Alabama Supreme Court a few years back said was not fraud. Perhaps we should revisit the issue in Alabama.
Lawyers at Beasley Allen continue to vigorously investigate fraud against both the federal and state governments and encourage any person who knows of fraudulent activities to step forward. Potential whistleblowers have the right to not be retaliated against for doing the right thing and reporting the fraud they have witnessed. Anyone considering doing the right thing and blowing the whistle is strongly urged to seek legal advice before doing so. The lawyers in our firm who handle the claims are very familiar with the federal False Claims Act and its state counterparts. They can guide whistleblowers along the process. If any of our readers have any information and would like to speak with a lawyer, they can contact Andrew Brashier at Andrew.Brashier@beasleyallen.com, or at 1-800-898-2034 or 334-269-2343.
Source: Reuters and Dailyherald.com
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