Health Care Whistleblower Lawsuits Bring in Another $375 Million

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This has been quite a week for settlement announcements in the world of the False Claims Act. In the past two days, the Department of Justice has announced an additional $375 million in settlements initiated by whistleblower lawsuits. This follows the earlier Novartis announcement that it would pay $390 million to resolve.

Yesterday, the DOJ announced the $125 million settlement in the civil and criminal investigations of Warner Chilcott. In addition to the money, a subsidiary of the company agreed to plead guilty to a criminal charge of health care fraud.

The pharmaceutical manufacturer was engaged in a variety of illegal schemes, including the payment of kickbacks to physicians through speaker fees allotted to medical education events. Although ostensibly the speaker fees and meals or entertainment were provided as part of medical education programs, they were in reality a sham widely acknowledged in the company as a way to increase the prescriptions of the providers and their staff attending.

Warner Chilcott was acquired by Actavis in 2013.  Actavis subsequently changed its name to Allergan after acquiring that company in 2015.

Today, the Justice Department also announced that nearly 500 hospitals would pay more than $250 million to resolve allegations that they implanted cardiac devices in patients in contravention of Medicare regulations imposing a waiting period after a coronary event. There has been speculation previously that this investigation is the largest in the history of the False Claims Act in terms of the number of hospitals involved.

Between the two cases, the government will pay the whistleblowers approximately $60 million as their share of the recoveries. The False Claims Act requires the Government to pay eligible whistleblowers between 15 and 30 percent of the Government’s recovery as a result of the information provided by the relator, as a whistleblower is known under the law.