False Claims Act Recovers $3.1 Billion in 2010 from Health Care and Drug Industries

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Over three billion dollars in stolen money was recovered by the U.S. Department of Justice in fiscal year 2010 - stolen money that was tracked down thanks to whistleblowers.

According to the advocacy group Taxpayers Against Fraud Education Fund, more than 80 percent of all successful recoveries under the False Claims Act are due to whistleblower reports. The False Claims Act allows third parties, or whistleblowers, to sue contractors suspected of committing fraud against the government.

The False Claims Act allows for statutory fines and triple damages to be paid, with whistleblowers receiving from 15 to 30 percent of the recovered amounts.

Fraud is common in a number of industries, such as defense, education, transportation, and oil and gas, but most fraud recoveries in the last few years have been against pharmaceutical companies for illegal marketing practices.

Top Whistleblower Lawsuits Against Drug Manufacturers

While the $3 billion recovered this past year appears to be a large number, the recovery in 2009 was larger - with Pfizer and Eli Lilly alone each paying over a billion because they promoted drugs for uses not approved by the FDA.

Recoveries under the False Claims Act in 2010 (the fiscal year ended on September 30) found Big Pharma topping the list with eight of the 10 largest federal settlements. The largest recoveries included:

  • $600 million paid by Allergan for violating label marketing practices for Botox
  • $520 million paid by AstraZeneca for illegally marketing an antipsychotic drug
  • $422.5 million paid by Novartis for marketing Trileptal for unapproved uses and paying kickbacks to physicians
  • $313 million paid by Forest Laboratories for distributing an unapproved thyroid medication and promoting off-label uses for two antidepressants

Thus far, fiscal year 2011 has also yielded a recovery against Big Pharma; GlaxoSmithKline recently agreed to pay $750 million for "knowingly" selling tainted medications.

$15 dollars are returned to Americans for every dollar spent on fraud investigations and prosecutions under the False Claims Act, as reported by Taxpayers Against Fraud. Individual states also benefit in these settlements, recovering millions of dollars stolen from Medicaid.

Source: Drug Makers Top List of Federal Whistleblower Lawsuits