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Feb 15, 2021 by |

Los Angeles County Whistleblower Attorney: Settlement Of False Claims Allegations Against MS Drug Maker


Whistleblower Alleges Illegal Kickback By Drug Maker

Pharmaceutical Manufacturer Allegedly Made Patient Copays Through Foundations

Whistleblower Will Receive $3.96 Million Out Of $22 Million Settlement

Health care providers including drug makers, hospitals, clinics, equipment suppliers, and physician groups are prohibited from paying kickbacks for certain medical referrals under the Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and the Stark Law (42 U.S.C. § 1395nn (“Limitation on certain physician referrals”).  When the kickbacks relate to medical services being paid for by Medicare, Medicaid or other government-sponsored health programs, the kickbacks also constitute violations of the False Claims Act (FCA), 31 U.S.C. § 3729 et seq..  Individuals can bring a case under the FCA on behalf of the government (the individual plaintiffs are referred to as “relators” and the case is known as a “qui tam”) and those individuals receive rewards when the government recovers from the wrongdoers. 31 U.S.C. § 3730(d).  The Los Angeles whistleblower attorneys at Evans Law Firm, Inc. represent whistleblowers with credible information of illegal referral kickbacks, overbilling, false certifications, reimbursement for unapproved medications, miscoding procedures, or other fraud perpetrated in the context of government payment for medical services, drugs, and devices.  If you have credible information of fraud against the government call our Los Angeles whistleblower attorneys. today at (415) 441-8669.

Drug Maker Allegedly Made Kickback Payments

In one recent settlement of a large FCA cases[1] a large pharmaceutical company agreed to pay $22 million to settle a lawsuit alleging it committed unlawful conduct involving two multiple sclerosis (MS) drugs.  A whistleblower initiated the FCA case after which the U.S. Department of Justice (DOJ) investigated the company for allegedly engaging in an illegal kickback scheme that violated the FCA, the Stark Law, and the Anti-Kickback Statute.  According to the government, the company used two foundations as a channel to pay the copays of Medicare patients who would take its MS drugs. The pharmaceutical company’s conduct caused those patients to buy Medicare-reimbursed prescriptions for the defendant’s drugs as opposed to drugs produced by its competitors.  As part of the scheme, defendant allegedly identified certain patients for Advanced Care Scripts (ACS) in its free drug program, and then worked together to transfer these patients to the foundations and the company gave those patient-care foundations contemporaneous funds to cover the costs of Medicare copays for most or all of these patients. Medicare paid the patients remaining costs for the prescribed drugs. First Assistant United States Attorney Nathaniel R. Mendell commented on the settlement, “[Defendant] coordinated with ACS to game the foundation system by timing its payments to two foundations with its transfer of financially needy free drug patients, all so that [defendant] could obtain significant financial rewards. By treating the foundations simply as conduits to pay the co-pays of its own patients [defendant] violated the anti-kickback statute and undermined Medicare’s co-pay structure, which Congress intended as a safeguard against inflated drug prices.”

Whistleblower Rewards In Qui Tam Cases

The whistleblower or qui tam, provision of the False Claims Act allows private parties to file fraud charges on behalf of the government and to share in any recovery.  The law also allows the government to intervene in such cases, as the government did in this action.  In the reported case, the whistleblower will receive approximately $3,960,000 of the $22 million settlement. Cases such as this one begin with a sealed complaint alleging the violations supported by the whistleblower’s original and credible information of a defendant’s fraud against the government.  31 U.S.C. § 3730(b).  The complaint remains under seal for 60 days during which the government investigates the relator’s claims.  31 U.S.C. § 3731(b)(2).  If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.  In complex cases, the government investigation may last for considerable periods of time and include review of years of information and documentation and interviews of all persons involved.  From the filing of the complaint and throughout the process, employers are prohibited from retaliating against you for bringing a FCA qui tam case, and your complaint can include claims for relief against your employer’s retaliatory actions.  31 U.S.C. § 3730(h).

Contact Us

Ingrid M. Evans and the other Los Angeles County and California whistleblower attorneys at Evans Law Firm represent individuals with information of health care fraud against the government under Medicare, Medicaid or other government-sponsored health care programs.  Individuals with this kind of information include employees, former employees, auditors, bookkeepers, physicians, nurses, independent contractors, sales representatives, agents and the like.  If you have information of fraud call Ingrid and our other attorneys today at (415) 441-8669, or by email at <a href=””></a>.  We also handle bank fraud whistleblower cases under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), commodities and futures trading cases under the Commodities Futures Trading Commission Whistleblower Program, securities fraud cases under the Securities and Exchange Commission Whistleblower Program and FINRA Whistleblower Office and offshore tax evasion and other tax fraud cases under the Internal Revenue Service Whistleblower Office. 

[1] Evans Law Firm, Inc. was not involved in the case in any way.  

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