Articles Posted in Pharmaceutical Fraud

In 1994 the seven CEOs of the major American tobacco companies testified before Congress that nicotine was not addictive. Two years later, VP for research and development at the Brown & Williamson tobacco company Jeffrey Wigand came forward, and reported that his employer knowingly doctored the nicotine content, adding toxic substances such as ammonia, in its cigarettes to enhance its addictive qualities. National new broke out and tobacco companies were forced to reveal the truth.

Likewise, in our communities examples of courageous people who report fraudulent wrongdoings by businesses and government agencies abound. Recently a New Hampshire resident reported how medical product companies sent her diabetes medication without previous authorization from her doctor. Her report led to the discovery of how the medical companies had been sending medications without doctor authorization to many other people, and submitting unauthorized claims to Medicare. Ultimately, the companies paid $35 million to resolve the allegations.

Our society relies on courageous people to detect and stop businesses and government institutions from violating people’s rights, engaging in corruption, committing fraud, or outright lying. Recognizing the value of these informers in helping maintain a strong democracy, the law encourages citizens to report potential wrongdoings by offering extensive legal protection and a generous compensation. Just last month President Obama signed into law a legislation that expands protection for whistleblowers against retaliation.

Massachusetts offers plenty of legal defenses for citizens who report false claims and other transgressions made by government agencies and private businesses, or at their places of employment. The False Claim Act and the Whistleblowers Act, set forth in the Massachusetts General Laws, defines the types of activities that should be reported and the rewards for those who take action. We would like to provide a brief summary of its contents.
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The nation’s largest drug wholesaler (according to revenue) has agreed to pay $151 million to 30 separate states in a settlement over claims that the company overcharged for about 1,400 brand-name medications from 2001 to 2009. According to state and federal officials, McKesson Corp. is accused of deliberately overcharging for prescription drugs in order to earn a profit. Widely-used prescriptions, such as Lipitor and Prozac, were allegedly marked up by as much as 25 percent.

The company allegedly inflated the prices when reporting to First DataBank Inc., which is a publisher of medication prices and is used by most state Medicaid programs to set payment rates. New York Attorney General Eric Schneiderman released a statement saying that the settlement “holds McKesson accountable for attempting to make millions of dollars in illegal profits.” New York is set to receive $64 million out of the total amount in restitution. California and Illinois are also among the states to receive money from the settlement.

Perhaps most troubling is the fact that the company faced similar allegations back in 2008 and ended up paying almost $500 million as a result. The amount was distributed to both private and public payers. However, McKesson continues to deny any wrongdoing and a company spokesman said that it “did not manipulate drug prices” or “violate any laws.”
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According to filings by the US government in federal court in Boston, GlaxoSmithKline has entered a guilty plea to misdemeanor charges that it illegally promoted Wellbutrin and Paxil for uses not that were not FDA-approved, as well as failed to report clinical data about the diabetes drug Avandia. As part of the settlement, Glaxo will pay $3 billion, including a $956.8 million criminal fine and a $300 million civil settlement for not providing best prices and underpaying rebates under the Medicaid drug program. The pharmaceutical company will forfeit $43 million.

This is considered the largest health care fraud case in the US and it involves the biggest UK drug maker. Four Boston whistleblower lawsuits relating to this case will also be resolved from this settlement.

Federal prosecutors started investigating Glaxo’s drug marketing practices with nine of the company’s biggest sellers in 2004. Paxil, which was only approved by the FDA for adult use, was promoted by the drug maker for use by teens under age 18 who were suffering from depression. Glaxo also promoted depression med Wellbutrin for the unapproved treatment of substance abuse, weight loss, and sexual dysfunction. (Although doctors can prescribe medications for uses that are not approved, drug companies are not allowed to market drugs for unapproved uses. To do so means a manufacturer has promoted a drug for off-label uses, or “misbranded” it.)

The US government also contended that Glaxo did not give certain safety data about Avandia between 2001 and 2007. Since then, the FDA now mandates that there be two black box warnings on the diabetes medication’s label warning doctors about the possible risks of heart attack and congestive heart failure.

Massachusetts Whistleblower Lawsuits
According to the lawyer of two of the whistleblowers, they were the ones that first told Glaxo it was marketing the drugs illegally in 2001. Now, as part of its settlement, Glaxo will pay $210 million to the states and $832 million to the US government. The Massachusetts whistleblowers are entitled to a percentage of the recovery.

GlaxoSmithKline settles healthcare fraud case for $3 billion, Reuters, July 2, 2012
GlaxoSmithKline Reaches Plea Agreement Over Drug Labeling, Bloomberg, July 2, 2012

More Blog Posts:

Virologists File Whistleblower Lawsuit Against Merck Over MMR Vaccine, Boston Injury Lawyer Blog, June 16, 2012

Pharmaceutical Fraud May Be Grounds for Filing a Massachusetts Whistleblower Lawsuit, Boston Injury Lawyer Blog, July 23, 2011

$25M Whistleblower Settlement Reached in Hospice Fraud Case Against Odyssey Healthcare Inc., Boston Injury Lawyer Blog, March 5, 2012 Continue reading

Did you know that pharmaceutical fraud is one of the most common reasons for False Claims Act recoveries? Not only that, but this type of fraud is costing taxpayers millions annually. If you are an employee working in the pharmaceutical industry and you have information about fraud being committed by your employer, you may want to consider filing a Massachusetts pharmaceutical fraud whistleblower lawsuit and file a case on behalf of the federal government.

Some examples of Pharmaceutical Fraud that may be reason for filing a Massachusetts whistleblower lawsuit:

*Pharmaceutical kickbacks – To get doctors to prescribe/push their products, kickbacks may take the form of:

• Financial compensation for clinical studies, speaker fees, “grants,” or “teaching sessions”
• Free drug samples • Lavish accommodations, meals, and entertainment during advisory board meetings and “investigator meetings”
• Data fees to insurance companies for information about their members, discounts, joint business ventures, and rebates • Financial incentives to Group Purchasing Organizations and insurers in exchange for designating a medication as their preferred drug formulary.

*Clinical Trial Fraud – Involves a pharmaceutical company fraudulently manipulating clinical trial data so that a drug is approved by the FDA

*Off-label marketing of drugs for purposes not approved by the Food and Drug Administration
*GMP Fraud– Violations of the Good Manufacturing Practices
*Best Price Fraud
Pharmaceutical companies have had to pay over $4 billion for pharmaceutical fraud cases. As a whistleblower, your qui-tam actions may entitle you to part of the compensation. Contact our Boston Whistleblower Attorneys today.

Related Web Resources:
The False Claims Act legal Center

Fraud and the pharmaceutical industry

More Blog Posts:
LabCorp Settles for $49.5M Medicaid Fraud Lawsuit Filed by Whistleblower Hunter Laboratories, Boston Injury Lawyer Blog, July 22, 2011
Whistleblowers Expose Medicare Fraud in the Hospice Industry, Boston Injury Lawyers Blog, June 28, 2011 Continue reading

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