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Mar 17, 2022 by |

San Francisco Whistleblower Attorney: Pharmaceutical Distributor Agrees To Pay $13 Million To Settle Allegations Of Illegal Kickbacks

ATTORNEY NEWSLETTER

Allegations Of Kickbacks To Physicians For Drug Purchases

Allegedly Paid Cash Bonuses To Physicians

Realtors Will Share $2.6 Million Reward

Kickbacks paid by drug manufacturers or distributors and pharmacies to physicians for prescribing drugs are against the law.  Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. When the drugs are paid for by government programs like Medicare, the illegal kickback is also a violation of the False Claims Act, 31 U.S.C. §§ 3729 et seq.  Under the False Claims Act (FCA), individuals with knowledge of illegal kickbacks or other forms of healthcare fraud may bring actions (known as “qui tams”) to recover government funds paid out as a result of fraudulent claims.  31 U.S.C. §3730(b).  If the government recovers, these individuals, known as “relators” are eligible for rewards. 31 U.S.C. § 3730(d).  If you have credible information of illegal kickbacks or other forms of healthcare fraud in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Pharmaceutical Distributor Settles FCA Allegations For $13 Million

In a recent settlement announced by the U.S. Department of Justice,[1] a pharmaceutical distributor agreed to pay $13,125,000 to resolve allegations that it violated the False Claims Act by paying “upfront discounts” to its physician practice customers, in violation of the Anti-Kickback Statute. When a pharmaceutical distributor sells drugs to a physician practice for administration in an outpatient setting, the distributor may legally offer commercially available discounts to its customers under certain circumstances permitted by the Office of Inspector General for the Department of Health and Human Services (HHS-OIG).   But HHS-OIG has advised that upfront discount arrangements present significant kickback concerns unless they are tied to specific purchases and that distributors maintain appropriate controls to ensure that discounts are clawed back if the purchaser ultimately does not purchase enough product to earn the discount. According to the government, the distributor in this case failed to meet these requirements because the upfront discounts it provided to its customers were not attributable to identifiable sales or were purported rebates which the distributor’s physician customers had not actually earned.  

“Pharmaceutical distributors are expected to play by the rules and not engage in illegal arrangements,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working with our law enforcement partners, we will continue to investigate kickback schemes that threaten the integrity of our federal health care system, no matter how those schemes are disguised.”

Fundamentals Of A Qui Tam Case

Realtors in the reported case will receive a $2.6 million share of the qui tam settlement as a reward. Qui tam cases begin with filing a complaint in the federal district court where the allegedly fraudulent conduct occurred.  31 U.S.C. § 3730(b).  The complaint is filed under seal.  The government has sixty days to review the allegations and decide whether to intervene.  This review period can be extended.  If the government decides to intervene, the government essentially takes over the litigation.  31 U.S.C. § 3730(c).  If the government decides not to intervene, the relator has the right to continue the litigation on his or her own.  If the relator continues the litigation alone, he or she receive a larger percentage of the amount the government eventually recovers.  31 U.S.C. § 3730(d).  The relator may also pursue claims for wrongful retaliation against the defendant if the relator was fired or demoted as a result of blowing the whistle.  31 U.S.C. § 3730(h).

Contact Us

If you have credible information of government fraud call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>.  In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program. 

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

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