The federal False Claims Act and its state equivalents can be used to take action against private parties that cause the government to pay more for products or services than they are worth. Moreover, these laws may be used to bring claims against entities that are heavily regulated by the U.S. government, especially pharmaceutical companies. From his New York office, whistleblower attorney James T. Ratner can guide plaintiffs nationwide through the process of bringing qui tam claims based on pharmaceutical fraud. Any type of misconduct that forces the government to incur financial losses may be an appropriate basis for legal action.Drug Companies and the Federal Government
Pharmaceutical drug companies interact with the federal government primarily in the development and regulation of new and existing drugs. Any drug that a company seeks to put on the open market must first be approved by the Food and Drug Administration. This process can be lengthy and often limits companies to very particular uses for certain medications. As a result, it is prone to fraud and corruption by companies seeking to circumvent these strict requirements.
Some pharmaceutical companies also provide medications directly to the government in a more typical form of contractor relationship. In particular, Medicare and Medicaid offer specific drugs to patients through their prescription programs. They set the availability and pricing for prescriptions on a federal level. When pharmaceutical companies seek to have their medications included and priced competitively on Medicare’s or Medicaid’s drug lists, fraudulent misrepresentations about the expense of such drugs may occur.Combating Fraud and Financial Misconduct in the Pharmaceutical Sector
Because of the unique industry in which they work, pharmaceutical companies are susceptible to particular types of fraud that can be exposed by whistleblowers. One of the most common problems, and the subject of several high-profile whistleblower lawsuits, is the off-market labeling of drugs by pharmaceutical companies.
When the FDA approves a drug, it may do so for a very limited purpose – known as the “on-label” use. Pharmaceutical companies are subsequently limited to that particular purpose or medical condition when advertising their drugs. Physicians, by contrast, are able to prescribe such medications for “off-use” purposes, including other conditions or diseases for which they believe the drug may be helpful. In several significant cases, including a 2012 settlement with GlaxoSmithKline for three billion dollars, pharmaceutical companies have been found to be marketing their medications for these off-label purposes, despite being prohibited from doing so. This off-label marketing is a form of fraud punishable under the False Claims Act.
Off-label marketing often occurs hand-in-hand with another type of fraud perpetrated by pharmaceutical companies: kickbacks. These are payments made to doctors or hospitals in order to encourage medical providers to prescribe the pharmaceutical company’s drugs to their patients. Instead of directly providing cash to these parties, pharmaceutical companies may offer lavish dinners, trips, nonmonetary gifts, and payments for “advisory” or “consulting” services. Providing these types of incentives is illegal and can be pursued under both the Anti-Kickback Statutes and the False Claims Act.
Finally, pharmaceutical companies may also engage in the more common practice of attempting to deceive the government as to the price and value of the product it is receiving. This is known as best price fraud. In order to contract with Medicare and Medicaid, pharmaceutical companies are required to provide their drugs at the best price available. Thus, they are not allowed to have contracts with other private third parties for rates lower than what the government is being charged. However, in practice, pharmaceutical companies may hide or disguise discounts being offered to others in order to keep Medicare or Medicaid prices higher than they should be, thereby causing the government to pay more than it should.Consult a Knowledgeable Qui Tam Attorney in New York
The fraudulent practices of large pharmaceutical companies are frequently to blame for rising drug costs and the increasing financial burden of health care. One effective means for addressing these problems is through the work of whistleblowers, who seek to expose and eliminate the corruption within the industry. If you currently work in the pharmaceutical or health care field and wish to report misconduct, New York lawyer James T. Ratner can advise you on the possibility of bringing a qui tam claim. With 18 years of experience, he can advise whistleblowers throughout the U.S. Call us at (845) 750-3293 or contact us online for a free consultation.