Justice Department Recovered $5 Billion in False Claims Act Cases in 2012

by Ashley D. Adams

(January 17, 2013) The Justice Department announced in December that it recovered over $4.9 billion in settlements and judgments in civil cases involving fraud against the government in 2012. This number set a Department record recovery for a single year.

The False Claims Act (FCA) is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, and military contracts. Most false claims actions are filed under the act’s whistleblower provisions, which allow private citizens to file suits alleging false claims on behalf of the government. If the United States prevails in the action, the whistleblower, known as a relator, receives up to 30 percent of the recovery. In 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.

Enforcement actions involving the pharmaceutical and medical device industry were the source of some of the largest recoveries this year. GlaxoSmithKline LLC paid $1.5 billion to resolve FCA allegations that the company (1) promoted the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for uses not approved by the Food and Drug Administration, and paid kickbacks to physicians to prescribe those and other drugs; (2) made false and misleading statements concerning the safety of the drug Avandia; and (3) reported false best prices and underpaid rebates owed under the Medicaid Drug Rebate Program. The Department also recovered $441 million from Merck to resolve allegations that the company promoted the drug Vioxx for off-label use for relief of rheumatoid arthritis and that company representatives made inaccurate, unsupported or misleading statements about its cardiovascular safety to increase sales.

Ashley D. Adams, PLC has extensive experience in representing both healthcare providers and relators in False Claim Act lawsuits. The firm has recovered millions of dollars on behalf of the taxpayers.

If you have further questions about this issue, please contact Ashley D. Adams, PLC via phone at 480.219.1366 or via email at aadams@azwhitecollarcrime.com. Ashley is a criminal defense attorney in Scottsdale and a former federal prosecutor.