Introduction to Our Qui Tam Investigation Practice
At Young Law Group, we specialize in representing whistleblowers in qui tam actions under the False Claims Act. Our goal is to combat fraud against the government and secure justice for those who bravely report wrongdoing. We are always open to exploring all types of fraud investigations, and are particularly focused on the timely topics below:
What is a qui tam?
Qui Tam is a provision of the False Claims Act that allows private individuals to file lawsuits on behalf of the U.S. government against companies and individuals that defraud governmental programs. Whistleblowers, also known as “relators,” are essential to uncovering and prosecuting these fraud cases.
Current Qui Tam Investigations
Ozempic (semaglutide) is a prescription medication used primarily for the treatment of Type 2 diabetes. Approved by the FDA, Ozempic is known for its ability to regulate blood sugar levels and, as a secondary benefit, promote weight loss. Manufactured by Novo Nordisk, it is part of a class of drugs known as GLP-1 receptor agonists that stimulate insulin production.
Why Ozempic May Be Subject to Qui Tam Actions
Qui tam actions are lawsuits filed by individuals on behalf of the government under the False Claims Act, designed to recover government funds obtained through false claims or fraudulent practices. Here are specific scenarios related to Ozempic that could potentially lead to qui tam claims:
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Off-Label Marketing: If Novo Nordisk or associated marketing entities promote Ozempic for uses not approved by the FDA, such as for weight management in non-diabetic patients, this could constitute a violation leading to qui tam claims. Off-label marketing that leads to prescriptions paid by government healthcare programs like Medicare or Medicaid can result in substantial penalties under the False Claims Act.
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Kickbacks and Unlawful Incentives: Qui tam actions could arise if there are credible allegations that kickbacks or other unlawful incentives have been offered to healthcare providers to preferentially prescribe Ozempic, thereby defrauding government health programs.
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Misrepresentation of Drug Safety or Efficacy: If insiders possess evidence that Novo Nordisk misrepresented the safety or efficacy of Ozempic to the FDA and the public, and these misrepresentations led to sales underpinned by government healthcare program payments, this could also lead to a qui tam lawsuit.
Pharmacy Benefit Managers (PBMs) are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other entities that pay for drugs. PBMs play a significant role in the healthcare system by negotiating with drug manufacturers and pharmacies to control drug spending and by managing the drug benefit component of health insurance plans.
Why PBMS May Be Subject to Qui Tam Actions
Given their significant control over drug pricing and reimbursement, PBMs can be involved in practices that may lead to qui tam lawsuits:
Spread Pricing: This occurs when a PBM charges a health plan more for a drug than it reimburses the pharmacies, keeping the difference. If done in a deceptive manner or leads to excessive costs to government programs, it could be a target for qui tam actions.
Rebate Manipulation: PBMs negotiate rebates from pharmaceutical manufacturers which are supposed to be passed on to the insurers and ultimately lower costs for beneficiaries. Failure to accurately report or pass on these savings to government-funded programs may constitute a false claim.
Formulary Manipulations: If a PBM manipulates formulary designs to favor certain drugs due to undisclosed financial incentives from manufacturers, rather than based on cost-effectiveness or clinical efficacy, it may result in fraudulent claims to government programs.
Non-Compliance with Regulatory Standards: PBMs must comply with a range of federal and state regulations, including transparency in their dealings and accurate reporting. Violations here can also lead to qui tam suits.